Ericsson to shut down U.S. CDMA operations

Ericsson is closing down its CDMA headquarters in the U.S., distributing the operations among its global network infrastructure divisions and eliminating 250 of the division’s 300 employees now working in San Diego.

Ericsson officials said today the move acknowledged that most of the global vendor’s CDMA business lies in Asia and there was little point in keeping the division in North America where its only customer is small regional carrier Leap Wireless. Ericsson global vice president of external communications marketing Pia Gideon said Ericsson would continue to support and sell to customers in the U.S., but the CDMA group will no longer be a separate business unit.

“We’re going to reduce our operations in San Diego and eventually close it down,” Gideon said. “We see a lot of commonality between our CDMA 2000 and Wideband CDMA research. For efficiency reasons, it makes sense to move it into our global [networks] operations.”

In 1999, Ericsson bought its way into the CDMA market by taking over Qualcomm’s networks business after that vendor decided to focus on core technology development instead of handsets and infrastructure. Since then the division has grown, but mainly in emerging markets. Its biggest customer is now China Unicom, the mammoth Asian carrier building out both CDMA and GSM networks in Mainland China. Those geographical realities were compounded by the fact that heavy consolidation in the U.S. market makes it unlikely Ericsson will be able to land a new deal with a domestic CDMA carrier.

Ericsson said it will begin either relocating or laying off employees in San Diego in the next six to nine months, but it did not say when it would shut down the division entirely.