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Ericsson to acquire Telcordia for $1.15 billion

The company wants an even bigger part of operator's future investments

Ericsson has reached an agreement to acquire Telcordia Technologies for US$1.15 billion, the company said on Tuesday.

The deal will reinforce and expand Ericsson's position in the operations support systems (OSS) and business support systems (BSS) sector. These systems are used for network optimization and real-time charging, according to Ericsson.

The acquisition is a "perfect fit" when combined with its services organization and services organization, Ericsson said.

Today, operators are looking for new ways to charge for their services, including mobile broadband, and the acquisition of Telcordia will allow Ericsson to help operators with that part of their business as well. Telcordia's systems will help monetize the traffic and products that operators sell, Ericsson said in a statement.

For Ericsson, it also means a bigger presence in the North American market, where it was recently announced that Clearwire is outsourcing the management of its network to Ericsson for seven years to cut costs.

The Swedish telecom equipment maker is acquiring 100 percent of the shares in Telcordia from Providence Equity Partners and Warburg Pincus, and the deal is expected to close in the fourth quarter, taking effect during the first three months of next year. Telcordia is based in Piscataway, New Jersey.

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