Ericsson's move lifts confidence

Plans for a research venture ease the pain of Motorola's rebuff, says RICHARD BRADDELL.

Ericsson's decision to base a high-tech mobile internet applications research centre in New Zealand is a welcome salve after Motorola's choice of Australia to site a similar facility.

The joint venture with local information-technology consultancy Synergy will employ 50 fewer than the 200-staff Motorola research centre that was planned for Christchurch.

Ericsson will supply the core mobile technology, and Synergy will provide the systems integration and software engineering capability to build mobile internet applications for current and new 2.5 and third-generation systems.

In contrast to the bidding war that scotched New Zealand's Motorola hopes, Ericsson was keen to come to New Zealand after the success of its fixed-wire internet research facility in Napier, which has scored multimillion-dollar export orders for a high-speed internet technology.

The Ericsson decision is an added fillip after the suggestion that Motorola's reluctance to invest in New Zealand was in part due to concern that the country had insufficient research talent.

The new joint-venture company - Ericsson-Synergy Mobile Internet Applications Centre - may take 25 or 30 staff from existing Ericsson and Synergy operations.

The rest will be recruited after the formal start date of January 1.

Ericsson-Synergy's new chief executive, Stephen Crombie, said Ericsson's decision was reached after considering the local supply of necessary skills, the ability to build on existing operations, a suitable joint-venture partner and the size of the domestic market.

The joint venture says it is happy with the supply of graduates, but it is talking to tertiary institutions to try to make them more aware of its needs.

It has been given no explicit Government incentives to come to New Zealand, but Mr Crombie said Tradenz and Industry New Zealand had pointed it in the direction of existing financing from the Foundation of Research, Science and Technology and from four new R&D funds established by the Government.

Ericsson-Synergy will still have to apply for the money, but it seems likely to be treated favourably.

Sources say the initial capital investment to set up the Wellington-headquartered research centre could be about $10 million.