[April 13, 1999]

Ericsson Acquires Torrent Networking, TouchWave To Boost IP Offerings

Ericsson made two acquisition announcements: The company purchased Torrent Networking Technologies Corporation, a supplier of high-capacity edge routers with dynamic traffic shaping capabilities (aggregation routers); and Ericsson also acquired TouchWave, Inc., a provider of enterprise IP telephony solutions.

Torrent Networking Technologies
Under terms of agreement, which is effective immediately, Ericsson will execute a cash purchase of Torrent for a total of $450 million.Torrent employees will become part of the Ericsson Datacom organization and remain in the Maryland and Research Triangle Park, N.C., facilities.

The acquisition gives Ericsson carrier-class routing equipment to aggregate and deliver Quality of Service (QoS) IP traffic. In addition, the aggregation router will serve as a Label Edge router to complete Ericsson's MPLS (Multi Protocol Label Switching) solution for IP over ATM. Ericsson can thereby offer new and existing customers end-to-end IP and ATM solutions.

"The Torrent products are a strategic addition to Ericsson's carrier-class networking portfolio," said Sven-Christer Nilsson, president and CEO of Ericsson. "The acquisition moves Ericsson squarely into the IP playing field and will have a substantial impact on our ability to provide a complete data networking solution. This is in line with our strategy to offer fully integrated capabilities for converged wireless and wireline voice and data networks."

"Torrent has Internet-hardened technology that amplifies our suite of data products to be one of the strongest and most flexible end-to-end IP and IP-over-ATM solutions on the market," said Mike Thurk, general manager, business unit Datacom Networks & IP Services. "Ericsson today delivers comprehensive, readily available solutions for both IP and ATM-based networks. The Torrent products, with their critical traffic-shaping capabilities, will play a pivotal role for both solutions."

TouchWave, Inc.
Ericsson acquires TouchWave, Inc., a Silicon Valley based provider of enterprise IP telephony solutions. Under the terms of the agreement, Ericsson paid $46 million in cash.

The TouchWave product range targets small and medium sized businesses and branch networks of larger organizations. TouchWave products are designed to deliver significantly lower costs for communications, ease of management and administration and offer end-user services on a single, IP-based network platform.
The acquisition gives Ericsson fully featured Internet Protocol (IP) PBX systems that support with voice over IP, wireless LAN terminals, existing analogue handsets and third party software applications for office use.

"The IP-PBX market is driven by the need to reduce costs and to consolidate scarce networking resources," said Haijo Pietersma, executive vice president and head of Ericsson's Business Segment Enterprise Solutions. "It offer users new and enhanced IP-enabled network services. The TouchWave products are particularly attractive to Internet Service Providers (ISP) who need to add value to their present data network services."

TouchWave's WebSwitch 2000 and WebSwitch 1608 complement Ericsson's Business Phone 250, MD110 PBX product lines and offer telephony solutions to customers building IP-centric networks. The WebSwitch family has received favorable reviews and numerous awards. Through this acquisition, Ericsson can enhance its presence in the US and target new distribution channels.

TouchWave's IP PBXs are turnkey network appliances that provide full feature PBX services, voice mail and auto attendant across IP networks. The TouchWave products can be managed remotely from a Windows 95/98T or NT PC from any location on the network. The products plug directly into the IP network through an Ethernet port and connect to the public switched telephone network (PSTN) through a variety of standard analog and digital interfaces.

Ericsson also plans to use TouchWave's technology and technical expertise to accelerate and enhance its existing developments in IP-telephony. Ericsson plans to integrate TouchWaves' IP telephony technology with Ericsson's range of IP access products (the Tigris multi-service access platform) for easy scalability and smoother integration of enterprise networks to the carrier edge. This new product line will create a family of all-in-one network products supporting voice, data and video services.

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