Mats H Olsson, president of Ericsson, Greater China, yesterday said the Swedish firm might announce a slew of partnerships with content developers, Internet companies and wireless value-added service providers in China in the next six to nine months.

The possible partnerships are part of Ericsson's strategy of providing infrastructure for integrated multimedia such as music and television.

In the past months, the global telecoms equipment market has experienced a consolidation, seeing Alcatel merge with Lucent, and Nokia and Siemens combine their network businesses.

The consolidation is turning up the heat on Ericsson both globally and in China.

Ericsson last year held 30.7 percent the largest share of China's mobile telecoms equipment market based on the GSM standard, which prevails in the country, according to Beijing-based Norson Telecom Consulting.

Nokia and Siemens owned 19.7 percent and 9.8 percent shares. The combined strength of Nokia and Siemens would not pose a serious threat, said Olsson, adding that rivals might need sometime to stabilize their market shares" during the merger.

"Such mergers and acquisitions aim to achieve scale of economies. As the tie-ups are extremely giant mergers, full integrations will take substantial time and effort," he said.

"And you can't achieve success without further actions."

Olsson notes a swift shift in the fast-growing multimedia business would help Ericsson maintain market leadership and fight off competition.

Ericsson on September 15 announced it was reorganizing itself into three business units, one of which would be dedicated to multimedia business as part of its plan to become more customer-oriented.

The Alcatel-Lucent and Nokia-Siemens tie-ups will lead to massive layoffs. But Ericsson's alignment will see the firm recruit an additional 500 engineers to accelerate research, especially into next generation networks and multimedia technology.

Olsson said he hoped some recruitment could happen in China. Ericsson already has a number of R&D facilities in the country, with two dedicated to multimedia technology.

A big bet on multimedia could bode well for Ericsson in China. The market for multimedia offerings in the country such as mobile music downloads and ring tones has been on a roll.

The upcoming roll-outs of 3G (third generation) telephony, which offers a higher downloading speed, could give a big boost to multimedia sales.

Olsson said Ericsson would work closer with Sony Ericsson, a mobile phone joint venture between Ericsson and Sony, to boost multimedia sales.

Sony Ericsson is one of the fastest-growing mobile phone brands in China. In Hong Kong, one of the world's most competitive mobile phone markets, Sony Ericsson last month took a 25 percent market share, almost twice that of Motorola.

(China Daily September 27, 2006)