Ericsson adds CENX products into 5G-ready services after $40m deal

19 February 2019 | Alan Burkitt-Gray

Cover

Ericsson is already incorporating CENX’s products into its services, ready for 5G, just a few months after the acquisition for around $40 million in September 2018.

Erwin Van Rijssen (pictured), head of the 5G core programme at Ericsson, said yesterday at a briefing in London that the CENX products were already being used for its artificial intelligence (AI)-based orchestration in order to monitor the quality of network slices.

Ericsson announced the purchase of CENX on 4 September 2018, when it said the acquisition would boost its portfolio of operations support systems (OSS) with vendor-agnostic service assurance and closed-loop automation capability.

Nan Chen, founder of CENX and, until the acquisition, vice-chairman, told Capacity yesterday that the deal was completed on 14 September – just 10 days after the plan was announced.

Ericsson confirmed to Capacity that it made no specific announcement of the completion. “The acquisition was mentioned in our Q3 release, not specifically announced,” said an executive in Stockholm.  

No price was ever put on the deal, but the small print on page 10 of the third quarter report, issued on 18 October 2018, says: “Investments in M&A were SEK -0.4b [billion], mainly related to acquisition of CENX in Digital Services.” That 400 million Swedish kronor is equivalent at today’s exchange rates to $43 million – though the sum could include other acquisitions as well as disposals.

Van Rijssen said yesterday: “We’ve integrated [CENX] with the orchestrator. We see an acceleration because we’ve integrated deeper into the software. We’ve taken the first step now because the software is available now.”

At the briefing, held as a preview for next week’s Mobile World Congress in Barcelona, Ericsson said that 42 operators have signed memorandums of understanding that they will use its 5G systems.

“We have announced 10 deals,” said Arun Bansal, head of the company in Europe and Latin America. He listed AT&T, Sprint, T-Mobile US and Verizon in the US; Swisscom, Telenor, Vodafone and Wind Tre in Europe; and SK Telecom and Telstra in the Asia-Pacific. The Telenor deal covers Denmark, Norway and Sweden, he added.

Bansal sidestepped questions about software security, asked following Ericsson’s software issues at SoftBank, Telefónica and other operators in December but also because of rival supplier Huawei has been challenged to prove there are no security flaws.

“You cannot do testing of software,” he said. “Testing can address some issues but might slow down innovation. We test software while it’s being built. Software is deployed on live networks.”

Thomas Norén, head of 5G commercialisation, said that technological and spectrum advances will reduce the cost per bit to one tenth that of 4G, citing trials “in one major European city”, which he did not name.

What are the specific differences that a consumer would notice? Van Rijssen said: “You will not run into congestion. I’m quite sure there will be new developments and killer apps – but if I knew them I wouldn’t tell you.”

CENX started as a carrier ethernet neutral exchange – hence the name. However, in order to fully serve exchange customers, CENX developed its own software to automate the processes – and in 2012 it switched course to become exclusively a software vendor.

Chen told Capacity in September: “We have pioneered a new generation of cloud native service assurance solution that is foundation for autonomous networking – the ultimate goal.”

He added: “CENX’s service assurance combined with Ericsson dynamic orchestration, a complete suite of lifecycle service orchestration (LSO) as [it is] known in the industry, provides an industry-leading closed-loop automation, and has potential to transform the industry in 5G, wireline and virtualisation.”