Ericsson reported a sharp year-on-year increase in income for Q4 2019 as a slowdown in the US induced by ongoing operator merger uncertainty was offset by growth elsewhere, largely in northeast Asia and the Middle East.
In an interview with Mobile World Live, Ericsson EVP and head of business area Networks Fredrik Jejdling said the company had a “really good start on 5G” with initial deployments, but added the company had since experienced a drop in the US.
This dip was attributed to ongoing uncertainty around the potential merger of Sprint and T-Mobile US, both Ericsson customers. The vendor, however, remained bullish on the region stating the underlying business fundamentals remained strong.
While praising progress in Asian markets including South Korea and Japan, Jejdling conceded Europe remained challenging for sales of 5G kit.
In February 2019, Ericsson executives bemoaned the progress of regulators in Europe to make 5G spectrum available, a situation Jejdling said had not significantly improved.
“If you look at the RAN market, the European one is not growing,” he explained, stating the region was a “really difficult spot” as, outside of a few countries on the continent, regulation and limited availability of 5G spectrum was still hampering progress.
Ericsson overturned a net loss of SEK6.5 billion ($680.8 million) in Q4 2018 with a profit of SEK4.5 billion in the recent period. The 2018 figure was itself a massive improvement from the previous year, as the company’s sweeping restructure began to make an impact.
Net sales in Q4 2019 were up 4 per cent year-on-year to SEK66.4 billion.
By the end of the year, Ericsson had 78 commercial operator 5G agreements in place, with 24 live networks.
In a statement, CEO Borje Ekholm said: “Our focused strategy with increased investments in R&D combined with operational efficiency is paying off. We have regained technology leadership, recovered previously lost ground in several markets and improved the financial results.”
During the quarter the company also settled a long-running corruption investigation by US authorities, having already made a provision in its accounts earlier in the year to cover the expected charges.Subscribe to our daily newsletter Back