Ericsson Says It Will Buy Telcordia for $1.15 Billion

Telefon AB LM Ericsson, the world's largest maker of equipment for mobile-phone networks, said it has agreed to buy privately owned telecommunications-software company Telcordia Technologies Inc. for $1.15 billion, a deal that will help it manage the explosive global growth in smartphone and broadband-Internet use.

Ericsson Chief Executive Hans Vestberg described Telcordia as a "perfect fit." Telcordia provides software and services to fixed-line and wireless carriers, helping them manage their networks more efficiently. Its next-generation products, centered on Internet-protocol-based communications, are expected to bring the lion's share of its revenue in coming years. Ericsson, which says it routes two out of every five of the mobile calls made through its systems, expects huge growth in the market for such software and services as more and more mobile devices connect to the Internet, overburdening networks. The deal also gives Ericsson a stronger foothold in the U.S. market as Telcordia's clients include major domestic carriers such as AT&T Inc. and Sprint-Nextel Corp.