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TELECOM

Ericsson head sees conditions improving for telecoms

Ericsson chief executive Carl-Henric Svanberg said Wednesday price pressure on mobile telephone networks might start to ease soon, financial news agency Direkt reported.

Published: 9 April 2008 16:53 CEST

“A few years ago there were players who were desperate to win contracts, and the Chinese players had the ambition to expand internationally and therefore put in low bids. Now there is reason to believe that that situation may ease,” Svanberg said on the sidelines of Ericsson’s annual general meeting.

“The Chinese were of course very interested in entering the market in various countries, and then it didn’t matter whether they made money from the contracts or not. Now they have a presence and are not as eager anymore,” he added.

Svanberg also said he saw no effect from the global credit turmoil on the telecoms industry for the time being.

Ericsson, the world leader in mobile telephone networks, and its rivals are suffering from a slowing market that the Swedish group expects to continue through 2008.

Investments in mobile network expansions and upgrades, which bring in more money than new rollouts, have been slowing down, and competition from Asia, notably China’s Huawei, has intensified.

In 2007, Ericsson posted a 17 percent drop in net profit to 21.8 billion kronor ($3.4 billion), while its market capitalization was halved.

On Wednesday, the Ericsson share price was up 2.22 percent to 12.42 kronor on the Stockholm stock exchange, with the market up by 0.18 percent overall.

Ericsson is scheduled to present its first quarter earnings report on April 25.

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Published: 11 April 2022 19:42 CEST
Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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