L.M. Ericsson Telephone Co. and Juniper Networks Inc. plan to invest some US$50 million to create a mobile Internet joint venture, the companies said Thursday.
The venture will provide mobile Internet routing products to be sold by Ericsson to customers including ISPs (Internet service providers) and wireless operators building 3G (third generation) mobile and GPRS (General Packet Radio Service) networks.
The companies said they would marry Ericsson’s mobile IP (Internet Protocol) expertise with Juniper’s experience in IP routing systems, to “bridge the technology boundary between mobile voice networks and IP data networks.”
On a conference call to announce the venture, Scott Kriens, chairman and CEO of Juniper Networks, said approximately 60 percent of the new company will be owned by Ericsson, with the remaining 40 percent held by Juniper. The company’s CEO will likely come from Ericsson, and its chief operating officer (COO) from Juniper.
Kriens added, “But more importantly, what we’re really bringing is investments in technology from both companies valued in the billions of dollars, as well as thousands of people who are immediately available” to develop and distribute new products.
Torbjorn Nilsson, senior vice president for marketing and strategy at Ericsson, said, “Our estimation is that by the end of 2003 there will be more than 1.2 billion Internet users. Half of them will be (on the) mobile Internet, and half will be connected into the fixed environment. These Internet users need to be connected to each other… to the IP backbone… and to the mobile service providers.”
Asked to estimate potential sales for the new company, Kriens said, “We do see a market size here over these next two to three years, particularly to look towards 2003, the mobile industry will be growing from approximately $50 billion to almost $100 billion in size. The routing infrastructure market in which Juniper plays will be in the $30 to 40 billion size in that 2003 timeframe.”
He added, “Our focus is not so much on the revenue that’s contributed specifically by the products of the joint venture, but the power it brings to the portfolios of both companies in addressing the (mobile Internet) market in general.”
Nilsson said the partners are still examining options for a headquarters site for the new venture, but that the “first option” being considered is the Boston area.