Ericsson Sells US Call-Routing Business Iconectiv to Koch Unit in $1 Billion Deal

Swedish telecommunications giant Ericsson AB has announced a $1 billion deal to sell its U.S. call-routing business, Iconectiv, to Koch Equity Development, a private investment arm of Koch Industries Inc. Ericsson expects to receive approximately $1 billion in cash, net of taxes, transaction costs, and other liabilities. The transaction is slated to close in the first half of 2025 and is projected to result in a one-time earnings boost of about 8.8 billion kronor (approximately $870 million).

The sale aligns with Ericsson’s broader strategy to cut costs and enhance margins amid a tough telecommunications equipment market. Both Ericsson and its Nordic rival Nokia Oyj have faced prolonged challenges due to lower-than-expected spending on 5G technology.

Ericsson had initiated the sales process for Iconectiv in 2020, with earlier estimates valuing the unit between $1.5 billion and $2 billion. Koch Industries, known for its extensive investments in technology and growth equity, has a history of significant acquisitions, including its 2020 purchase of the remaining stake in cloud-software firm Infor Inc for about $11 billion, or nearly $13 billion with preferred shares.

Iconectiv, based in Bridgewater, New Jersey, provides communications solutions to over 5,000 customers, including telecom companies and government agencies. The company specializes in numbering solutions, enabling users to retain their phone numbers when switching providers, and has worked with major clients such as AT&T Inc. and Verizon Communications Inc.