Ericsson swung to a loss in Q2 as costs from internal cuts and a sales decline in North America took their toll, though executives highlighted positives from its enterprise unit and network business in India.

Discussing its results, Ericsson EVP and head of business area Networks Fredrik Jejdling told Mobile World Live the drop in North America was due to customers using inventory previously stockpiled and a general slowdown in operator spending.

“There’s an overall cautiousness in the build out of 5G networks,” he said adding some big customers had sustained or cut capex. The company noted sales in North America declined 50 per cent year-on-year.

Network revenue dropped 13 per cent, with the company highlighting “record build out speed in India” as a positive. Here, it claims to be leading in market share, with Jejdling forecasting spend in the country will peak in H2.

However, the company noted its India boost only partly offset “softening” of other markets.

The networks chief noted the current global economic climate “should not be underestimated”, citing various factors pressuring operator spending as forcing a choice on where to allocate funds and assess the capex they can afford.

Ericsson booked a net loss of SEK600 million ($58.5 million), down from a profit of SEK4.7 billion in Q2 2022.

Revenue was up 3 per cent to SEK64.4 billion.

Declines in its bottom-line were attributed primarily to restructuring charges as part of ongoing cost cutting measures.

In Q2, it spent SEK3.1 billion on cost-reduction activities, with a high proportion of this related to staff redundancies.

During the period its headcount was reduced by 1,041.

Across the whole year it expects to spend SEK7 billion on restructuring, which is anticipated to save it SEK11 billion annually once complete.

In its results statement, CEO Borje Ekholm said Ericsson was building on its “strong position and despite challenging market conditions”, adding its Q2 met expectations.

“We continue to execute with discipline and focus without losing sight of the long term,” Ekholm said. “We are leveraging our 5G technology, growing our enterprise business and driving our cultural transformation to accelerate our growth trajectory and shape the communications industry landscape.”