Ericsson Acquires Vonage in $6.2B Stock Deal

Information and communication technology platform Ericsson on Monday (Nov. 22) announced its plans to acquire cloud-based communications company Vonage for about $6.2 billion through a stock deal that puts each share at a value of $21 after the deal was unanimously approved by Vonage’s board.

The deal will help Ericsson take another step in its plan to expand its wireless enterprise around the world and increase its market share in a business segment projected to be worth $700 billion by 2030.

“The core of our strategy is to build leading mobile networks through technology leadership,” said Börje Ekholm, president and CEO of Ericsson, in the joint announcement. “This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority.”

Rory Read, CEO of Vonage, said the companies “have a shared ambition to accelerate our long-term growth strategy.

“The convergence of the internet, mobility, the cloud and powerful 5G networks are forming the digital transformation and intelligent communications wave, which is driving a secular change in the way businesses operate,” he said. “The combination of our two companies offers exciting opportunities for customers, partners, developers and team members to capture this next wave.”

Related: Gaming and Extended Reality Among First 5G Use Cases For ‘Time-Critical Communication’

Last month, Ericsson said it has been piloting 5G for time-critical use cases with customers and industry partners since 2017. A 5G virtual reality digital twin enables colleagues in multiple locations to work on the same product and see the results of their work simultaneously. A digital twin is a digital representation of a physical object viewed through VR glasses or other digital interface.

In one such pilot with mining company Boliden, Ericsson tested drill rigs that had been retrofitted with autonomous operation and remote-control features that could help the company perform the same amount of blast operations with five modified rigs as they could with seven traditional rigs.

In another pilot case, Ericsson and Deutsche Telekom recorded a game played over a 5G cellular network with and without a managed low-latency feature to show the difference in the smoothness of the game in each format.