Ericsson acquires Vonage in a deal for 5G enterprise innovation

Ericsson has announced an agreement to acquire the IP communications business Vonage for $6.2 billion. Pending regulatory review and clearance, the deal is expected to close in H1 2022. Vonage is best known for its roots as a consumer VoIP telephony business before WhatsApp and the smartphone era led to a broad substitution of traditional phone calls for messaging and video calls. However, it has quietly but steadily shifted into enterprise, amassing a vast network of 1 million developers and 200 telecoms operator partnerships that allow the company to sell iterated versions of IoT, voice, video and authentication services to business customers.

The strategic rationale of this acquisition for Ericsson is to unleash the power of 5G innovation through the ‘network as a platform’ paradigm. Sectors such as healthcare, finance, transportation and retail are all in play, leveraging Vonage’s assets and developers alongside Ericsson’s own telecoms operator customer base and technology R&D leadership. With enterprise a large part of the incremental 5G revenue opportunity, this type of go-to-market model leveraging developer scale and customisation for end clients is likely to grow more widely.

Click here to read more (Reuters)