News - Friday, January 21, 2011 10:19 - 0 Comments

Telstra confirms Ericsson deal talks

The nation’s largest telco Telstra this morning confirmed it was in talks with Swedish networking giant Ericsson, which built its flagship Next G mobile network, for a major network expansion project reportedly worth $473 million.

Telco industry newsletter Communications Day reported Ericsson had won the deal this morning, noting that Ericsson would supply new network equipment such as radio controllers and backhaul equipment, for both mobile and backhaul transmission networks.

A Telstra spokesperson said the pair remained in discussions, while a spokesperson for Ericsson Australia declined to comment. If the deal does go through, it would represent the largest contract won by Ericsson since the Swedish company won the right to build Telstra’s billion-dollar Next G network back in 2005. And times have not been the best at Ericsson Australia in the meantime.

In October it was Nokia Siemens Networks — not Ericsson or rivals like Alcatel-Lucent or Huawei — which picked up a deal to supply up to $400 million worth of optical transmission gear to the National Broadband Network rollout, and in May mobile telco VHA awarded NSN a giant network management contract expected to be worth hundreds of millions of dollars. Ericsson was one of VHA’s incumbent suppliers, but lost out in the deal.

In addition, in October last year, Ericsson flagged plans to lay off 80 permanent staff and 10 contractors by the end of the year, in a repeat of its December 2008 cuts.

However, it hasn’t been all bad news for the company recently — in July it picked up a deal to build a nationwide transmission network for VHA.

Image credit: Adam Jakubiak, royalty free