Stockholm, Sweden-based Ericsson Inc. recently purchased Entrisphere Inc., a producer of next-generation IP-based services. The move, Ericsson said, will help strengthen the telecom giant’s fixed broadband access portfolio.
One analyst thinks Ericsson’s purchase of Entrisphere is motivated largely by Ericsson’s lack of fibre-based products.
“Ericsson did not have a good solution to address fibre to the home. Ericsson didn’t look at this and think it would immediately provide market share with this product or company. It was something that they saw they needed in their portfolio going forward,” said Teresa Mastrangelo, principal analyst for the Roanoke, Va.-based Windsor Oaks Group research firm.
“For Entrisphere, the acquisition provides some financial stability and enables them to accelerate not only their sales efforts, but development as well. The acquisition enables the Entrisphere platform to be sold and deployed on a global basis — not just in North America,” she said. Entrisphere uses Gigabit Passive Optical Networking (GPON) to distribute high-speed data to homes and businesses. GPON, a fibre-to-the-home network architecture, supports services like IPTV.
Bandwidth is increased by using an all-fibre network, says Mastrangelo.
“There’s no copper involved — it’s an all-fibre infrastructure. The GPON itself is a 2.5Gbps system, but it’s a shared infrastructure so bandwidth available is driven by the number of customers they want to put on a PON, but 100Mbps would not be out of line.”
IPTV, while still a relatively small market, is becoming more attractive for network companies. Last year, U.K.-based Tandberg Television Ltd. announced a merger to acquire Los Angeles-based Zetools Inc., a software company that helped distribute digital video over the Internet.
An Ericsson representative said the timing is right for buying Entrisphere due to increasing market adoption of IP-based services.
“We believe that there are multiple forces that are driving this industry towards higher bandwidth. Ericsson made the strategic decision to get into this market early. What we see is an evolution of broadband technologies that will gradually progress from what we call fibre-to-the-node to fibre-to-the-home,” said Dragan Nerandzic, chief technical officer of
