Ericsson eyes billing with $417M LHS acquisition

Infrastructure giant L.M. Ericsson announced it will pay around $417 million for German billing company LHS AG, a move that could pit Ericsson directly against telecom billing heavyweights like Amdocs Ltd. and Convergys Corp.
“Operators are quickly moving towards convergent charging and billing solutions to enhance their relationship with consumers, improve cost efficiency and limit financial risk,” said Carl-Henric Svanberg, Ericsson’s president and CEO. “Ericsson and LHS form a strong constellation of prepaid and postpaid solutions ready to immediately capture this opportunity. Ericsson’s leadership in real-time charging and mediation, together with the leading billing and customer care solutions of LHS, make the two companies a leading player in revenue management and strengthen our overall multimedia offering.”
Ericsson’s stock was relatively unchanged at the news, hovering around $38 per share. Amdocs’ stock was down slightly, while Convergys’ stock was up slightly.
Ericsson said LHS counts more than 120 customer installations, which the company said compliments its own roster of around 150 customers in prepaid/real-time charging and 300 customers in mediation. Ericsson said the acquisition offers “significant potential for revenue synergies from cross-selling and greenfield opportunities.”
The news is notable as Ericsson has been working to expand into a number of businesses outside of network equipment. Indeed, the company acquired Tandberg Television, is working on mobile content offerings for Turner Broadcasting, and has been active on the mobile music front through its Napster deal.
In other Ericsson news, the company announced it sold its Planet EV wireless network planning software product line to CTS International. Terms of the deal were not disclosed.