Ericsson warned it expects a decline in the RAN market to continue at least through to the end of the year, as the Swedish vendor recorded a net sales decline of 14 per cent in Q1 2024, largely fuelled by its Networks division.

In an earnings statement, Ericsson reported sales of SEK53.3 billion ($4.9 billion), down year-on-year from SEK62.6 billion in Q1 2023. Networks was a main contributor to the decline, with sales from the unit falling 19 per cent as “customers continued to caution with their investments”, Ericsson stated.

Looking ahead, the company said it was expecting the downturn to continue until the end of the year, mainly due to continued low operator spend as well as the investment pace in India continuing to normalise.

Notably, it also stated a recent forecast by research company Dell’Oro estimating the global RAN market to decline by 4 per cent in 2024 “may prove optimistic”.

Ericsson exec Fredrik Jejdling speaking against a blue backdrop

Speaking to Mobile World Live, Fredrik Jejdling, head of Networks at Ericsson (pictured, left), declined to provide an actual number on the decline it was expecting, but stated that 4 per cent “is actually a positive sign and we think it might be a bit more of a decline than that”.

Jejdling pointed out Q1 numbers are in line with expectation and represented a seasonality pattern, while pointing to its gross margin as reasons to be optimistic. Gross margin excluding restructuring charges improved to 42.7 per cent from 39.8 per cent, supported by its competitive portfolio, cost actions, increased IPR licencing and other margins.

“The key takeaway from my side is we tried, again to secure the best position in the market… that has allowed us to deliver a growth gross margin above expectations this quarter and puts us in a good position when the market picks up. We are not going to compromise on our technology leadership,” he said.

If current trends persist, Jejdling added sales overall will stabilise in the second half of the year, pointing to recent customer wins and the normalisation of customer inventory levels in North America.

Net income in Q1 increased 66 per cent to SEK2.6 billion.