(Adds analyst comment, details)
By Helena Soderpalm and Olof Swahnberg
STOCKHOLM Dec 22 Ericsson sees more
tie-ups between telecom operators and media companies after AT&T
Inc's planned acquisition of Time Warner Inc,
offering some hope for the no-growth telecom equipment gear
maker, its media chief told Reuters.
* Per Borgklint said the industry will likely see more such
acquisitions as operators hunt for more content while media
outlets seek more efficient ways to reach clients.
* AT&T's purchase of Time Warner will have a positive effect
on Ericsson in the long term though in the shorter term it may
lead to slower decision-making, Borgklint said in an interview.
AT&T is Ericsson media's biggest customer among telecom firms.
* "It'll be up to us to capitalise on it, but it's in
general very positive that they have a great interest where we
are active," he said.
* After spending more than 10 billion crowns ($1.1 bln) on
acquisitions over the last 10 years, Ericsson's media business
remains a loss-making operation. Some former executives have
told Reuters it should sell the division.
* But Borgklint said the media business is a good fit for
the firm due to sales and technical synergies with its networks
and services operations.
* Ericsson's media business eyes turning break even in terms
of profit in the second half of 2017, thanks to a push into new
Internet-based cloud solutions. It counts some of the world's
best-known broadcasters including BBC, FOX and HBO as clients.
* Ericsson, which has seen core revenue fall for the past
three years, has predicted annual growth of around 10 percent
for its media unit for the next couple of years, in line with
the market which is fragmented with many competitors in
different niches. The division makes up 5 percent of Ericsson's
* In 2015, Ericsson's revenue was 247 billion crowns.
* But Swedbank analyst Mathias Lundberg, who has a neutral
recommendation on Ericsson shares, said reaching those goals may
* "Since it's a software business, volume is decisive for
profitability. It's possible Ericsson could get some orders for
example from AT&T which is focused on its media investments," he
* Borgklint, who is based in Silicon Valley, said sales
growth in media will be driven by a move from traditional
broadcast media to individualised, increasingly on-demand media
consumption by mobile users on the go with their phones or
* Short-term growth in media will probably be generated from
existing operations rather than acquisitions, Borgklint said,
while allowing that he could be opportunistic if the right
target turned up.
(Editing by Mia Shanley and Eric Auchard)