With Nokia's recent move to acquire Alcatel-Lucent in full play, Ericsson (NASDAQ: ERIC) is now looking at its own purchase options, which, reports say, potentially could include Juniper or Ciena.
According to a Bloomberg report citing people close to Ericsson, the company's CEO Hans Vestberg will meet with his management team in June to discuss strategy.
"I see no reason why we, given the right preconditions, would exclude a larger deal," Ericsson Chairman Leif Johansson said in an interview with Bloomberg earlier this month. "But as you know, there aren't that many left."
By making an acquisition of either Juniper or Ciena, a vendor that it established a partnership with last year to pursue new optical and SDN opportunities, Ericsson could bolster its own wireline portfolio. This could enable it to more effectively compete against a larger Nokia, which would have a larger optical and IP routing portfolio.
Pierre Ferragu, an analyst at Bernstein in London, told Bloomberg that purchasing either Juniper or Ciena could help Ericsson "restore old order and avoid being marginalized."
While Ericsson has continued work with Ciena, the optical firm recently moved to bolster its SDN portfolio with plans of purchasing smaller rival Cyan Networks.
At the same time, one of the people close to Ericsson's planning process said the company is not sure Juniper has the right technology to meet service providers' ongoing migration to software-based networking.
Nokia, a company that sold off its wireline assets in recent years to realign its focus on wireless, would now be able to compete for a number of emerging wireline opportunities, including service providers' migration to 100 and 400G, SDN, NFV and fiber-to-the-home (FTTH) broadband services.
Despite the potential of either deal coming to fruition, Ericsson's Vestberg has said in recent years he prefers organic growth.
In April, Vestberg told Dagens Industri newspaper that the company's strategy is to purchase smaller companies.
- Bloomberg has this article
Editor's Corner: Could the Nokia/Alcatel-Lucent deal drive Ericsson to broaden its portfolio with a Ciena, Infinera or Juniper buy?
Nokia's $16.6B bid for Alcatel-Lucent puts company back into the wireline game
Nokia, Alcatel-Lucent confirm merger talks