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TeliaSonera Expands Its SI Capabilities with Dimension Data Sweden Acquisition

| April 13, 2007 | Business Telecom Services - Europe | Competitive Update

Analyst: Bernt Ostergaard

 

Current Perspective: Positive/Neutral
Vendor Importance: High
Market Impact: High


Event Summary

On April 12th TeliaSonera-owned Cygate acquired Dimension Data's Swedish subsidiary to strengthen its market position within managed IP/IT services in Sweden. Cygate has 250 employees located in 15 offices in Sweden and Finland. Dimension Data Sweden provides consulting, integration and managed services in networking, security, operating environments, storage and contact centre technologies and it has 74 employees.

Analytical Summary

• Current Perspective: Slightly positive on TeliaSonera’s acquisition of Dimension Data Sweden, because it expands TeliaSonera’s SI capabilities significantly. However, the acquisition does not address the Norwegian and Danish markets, and TeliaSonera still lags TDC Song in SI capacity.

• Vendor Importance: High to TeliaSonera, because it needs to strengthen its SI capabilities to support its largest business customers as they take up managed services, and it also needs to develop and support managed SME services.

• Market Impact: High on the Nordic enterprise services market, where TeliaSonera (with its recent reorganization) continues to evolve its NGN and managed services organization but needs to grow its professional services capability. While TDC Song can match its professional services staff levels, TeliaSonera is taking the Nordic lead in enterprise service delivery.

Competitive Positives

• TeliaSonera has quietly been expanding its SI capabilities by acquisition. Cygate was acquired in December 2006 and, with that acquisition, Måldata and Bravida Communications were added as well. Today, Cygate has 250 employees located in 15 offices in Sweden and Finland. Dimension Data Sweden adds 74 employees located in two offices in Stockholm and Malmö.

• Dimension data brings new competence areas into TeliaSonera, notably security, storage and contact centre technologies. As large customers expand their take-up of managed services, carriers like TeliaSonera need to expand their consulting-led services to include integration services as well as LAN and application management.

• Dimension Data has been mentioned as an acquisition target several times recently in relation to BT, KPN and T-Systems. TeliaSonera has now pre-empted this situation by grabbing the piece that covers its core Nordic market space.

• TeliaSonera now gets a set of professionals with deep insight into their competitors’ products and strategies in the managed IP services market and who can help TeliaSonera develop more competitive solutions.


Competitive Concerns

• Many European mid-range SI companies (i.e., ATOS Origin, Dimension Data, Getronics, Logica CMG) are up for grabs and the incumbent telcos are the most active buyers, either whole or chopped up in parts. However, snapping up parts and combining them with smaller SIs with a wide range of service areas does not guarantee well-integrated professional services.

• Dimension Data Sweden has no presence beyond Sweden, so TeliaSonera still lacks strong SI capabilities in Norway, Denmark and the Baltics. A local presence is important when bidding for SME business outside Sweden and Finland.

 


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Business Telecom Services - Europe

 

 
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