Swedish networking equipment and wireless technology vendor LM Ericsson Telephone Co. and router maker Juniper Networks Inc. today said they plan to invest $50 million to set up a joint venture that will market mobile Internet routing products to Internet service providers and operators of advanced wireless networks.
The new deal expands on an existing distribution agreement under which Stockholm-based Ericsson resells Internet backbone routers made by Sunnyvale, Calif.-based Juniper. The products developed by the joint venture will be sold exclusively by Ericsson, the two companies said.
The jointly developed technology, which Ericsson plans to use to augment its own line of wireless and fixed IP routing equipment, will be aimed at managing data communications between various mobile and IP networks. For wireless uses, the new products will be targeted at carriers building third-generation and general packet radio-service networks.
During a conference call today, Scott Kriens, chairman and CEO of Juniper, said Ericsson will own a majority stake of about 60% in the new company. The joint venture's CEO will likely come from Ericsson, with Juniper providing a chief operating officer, he added. Both companies will contribute developers to the joint venture.
Final agreements related to the joint venture are expected to be signed during the first quarter of next year. Torbjorn Nilsson, senior vice president for marketing and strategy at Ericsson, said the two companies are still examining potential headquarters locations for the new company. But the first option being considered is the Boston area, he added.