Business Tech

Ericsson to buy US cloud operator Vonage for $6.2bn

Ericsson to extend network exposure to edge

STOCKHOLM: Swedish telecommunications equipment maker Ericsson said it would acquire US cloud-based communications provider Vonage for $6.2 billion (5.5 billion euros).

The deal has received “the unanimous approval of the Vonage board of directors” and is part of Ericsson’s strategy to expand its presence in the wireless enterprise and broaden its global offerings, it said.

Vonage provides cloud-based communications to about 120,000 clients globally. Its sales reached $1.4bn in the year ended 30 September.

Vonage also provides unified communications and contact centre services, but its cloud-based communications platform delivers about 80pc of the company’s revenue, driving growth in the past three years.

Furthermore, Vonage’s API allows developers to embed its messaging, voice and video communication tools into other applications and products. This developer ecosystem of more than 1m registered globally will now get access to 4G and 5G network APIs via Ericsson.

“Vonage gives us a platform to help our customers monetise the investments in the network, benefitting developers and businesses,” said Ericsson CEO Börje Ekholm.

“Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of 8bn connected devices.”

The deal has received approval from the Vonage board and is now subject to shareholder and regulatory approval. It is expected to close in the first half of 2022.

Vonage will become a wholly-owned subsidiary of Ericsson, reporting as a separate segment in quarterly earnings. It will continue to operate under its existing name with all 2,200 employees expected to continue in their roles.

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