Ericsson submitted a bid yesterday for the assets of Riverstone Networks, challenging Lucent Technologies’ acquisition of the carrier Ethernet equipment vendor.

The Swedish firm offered $178 million in cash for Riverstone’s assets, topping the $170 million cash offer Lucent made on Feb. 7, 2006.

The two vendors will now bid for the company in a bankruptcy court auction to be held Monday, March 20, at 10:00 am Eastern time in New York.

Ericsson was the only competing bid other than Lucent’s that Riverstone received by the bid submission deadline, which was yesterday.

Riverstone’s combination of Layer 2 and Layer 3 technologies “plays a key role” in Lucent’s IP multimedia subsystem plans as well as Lucent's ambitions to capitalize on the IPTV market, Prudential Equity Group analyst Inder Singh wrote in a research note this morning.

“Ericsson competes in both of those markets as well and would therefore have a similar interest in Riverstone’s technology,” he wrote.