Creating and selling a computing device for an Internet market that is struggling to grow is expensive. Novatium Solutions, which sells networked thin clients through wireline telecom operators , has sold a minority stake to Ericsson India. In the past, Novatium has raised venture capital investment from NEA, and prior to that, funding from Rajesh Jain’s Emergic Ventures. While the amount of investment has not been disclosed, or the stake sold, note that Ericsson has board participation and the company release mentions this as a strategic investment.

The strategic importance of Ericsson coming on board for Novatium cannot be overstated, since the stake is being acquired by a managed services company with deep linkages with telecom operators. Ericsson India claims a pan India presence with over 34% market share, providing mobile networks to all major telecom operators: Aircel, BSNL, Bharti Airtel, Idea Cellular, Vodafone, MTNL, Reliance Telecom, Tata Teleservices and VSNL. Earlier this year, Ericsson announced an extended partnership with Bharti Airtel, India’s largest telecom operator, for the upgradation of Airtel’s network in 15 of India’s 22 telecom circles, for providing base stations, network, making Airtel’s network 3G ready.

After high speed wireless broadband networks are rolled out, and 3G and BWA services launched over the next year, the focus will be on devices for consumption of broadband. This is where Novatium could come in, as a service that Ericsson offers to (or through) its telecom operator clients, pushing Novatium’s PC-as-a-service concept.

In a company statement, Novatium CEO Alok Singh has said that the relationship with Ericsson will provide impetus to rollout Novatium services globally. In India, Novatium has partnerships with all wireline operators – Bharti Airtel, BSNL, MTNL and Tata, but the impression we have of this segment, is that scale has been a challenge for the company.

They have to create consumer demand first, even for low cost computing.

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