Ericsson forks out $9.5m for TUSC business

Ericsson forks out $9.5m for TUSC business

Ericsson is stepping up its services capabilities, purchasing telecoms, enterprise and utility integrator, TUSC Computer Systems, for $9.5 million.

The price tag is $2.8 million higher than that paid by former owner, Allied Technologies Australia (ATA), when it acquired the Melbourne-based TUSC business 12 months ago.

Ericsson vice-president of services, Simon Gatward, said TUSC would enhance its integration nous by providing additional resources and skills. Under the new agreement, the communications and networking vendor would retain all 80 employees at TUSC, as well as the brand.

Ericsson currently provided implementation services for its own portfolio of telecoms and networking products.

TUSC brought in expertise in network management, operating systems support and general telecoms management, he said.

"TUSC has business in areas that we haven't focused traditional on before," Gatward said. "It complements what we do nicely."

In particular, the transaction would give Ericsson the ability to expand out of its traditional telco hold and into the utility sector, he said.

Both organisations worked with the same customers in the telecoms space, including Telstra, but shared little overlap in other market segments. Current TUSC-only customers include Melbourne Water and United Energy.

"The key thing is that TUSC provides us with horizontal growth opportunities," Gatward said.

"We believe there will be utility companies looking to move into the telco space in one sense or another. For example, organisations like VoIP providers.

We see some amalgamation and synergy being leveraged between the telco and utility sectors as their systems are common.

"Whether you are putting IP down a wire or electricity, the billing management and infrastructure is similar."

Ericsson would aim to sell more comprehensive managed, consulting and integration services to these customers, Gatward said.

ATA put the TUSC business up for sale in August, just 12 months after purchasing it.

At the time, chairman and managing director, Michael Addison, attributed the decision to ATA's falling share price and inability to grow sufficiently through acquisition. The acquisition is one of five undertaken by Ericsson globally.

Last month, the company announced its intention to purchase telecoms vendor, Marconi for $US2.1 billion.

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