Ericsson

Structure

By early 2017, Ericsson's structure includes the following divisions:

• Networks
• Global Services
• Support Solutions
• Modems

In the spring of 2017, the company planned to change the structure, which includes three business areas:

• Networks
• Digital Services,
• Extended Technical Support and Managed Services,

and two separate divisions for the media business:

• Ericsson Broadcast & Media Services и
• Ericsson Media Solutions.

Performance indicators

Main article: Ericsson's financial performance

2023: Loss - $2.5 billion

At the end of 2023, Ericsson received revenue of 263.35 billion Swedish crowns (approximately $25.21 at the exchange rate as of January 23, 2024). This is 3% less than the result for 2022, when the figure was 271.55 billion crowns ($25.99 billion). The corresponding figures are given in the financial report published on January 23, 2024.

In 2023, Ericsson recorded a net loss of 26.1 billion Swedish crowns (about $2.5 billion). For comparison: a year earlier, the supplier of telecommunications equipment received a net profit of 19.1 billion crowns ($1.83 billion). The company attributes the losses to the impairment of goodwill of 31.9 billion Swedish crowns ($3.05 billion) and restructuring costs of approximately 6.5 billion crowns ($0.62 billion).

Ericsson earns revenue of SEK 263.35 billion

While the actions we have taken to improve financial performance are yielding results, we are not satisfied with our profitability and we still have a lot to do. In 2024, we expect a further decline in the market outside of China. At the same time, the uncertainty will be the same as in 2023, "says Börje Ekholm, President and CEO of Ericsson.

In cloud software and services, Ericsson met its targets and broke even at least in 2023, the report noted. In the segment of network equipment, the company's annual sales were at 171.4 billion Swedish crowns ($16.41 billion), which is 11% less than in 2022. Cloud software and services brought in 63.6 billion crowns ($6.09 billion) - plus 5% on an annualized basis. The corporate segment accounted for 25.7 billion kronor ($2.46 billion), and growth reached 76% year-on-year. All other areas provided 2.5 billion kronor ($0.24 billion) in revenue.^[1]

Business in Russia and CIS

Main article: Ericsson Russia

The history of partnership between Russia and Ericsson dates back more than 130 years from the moment when the first Ericsson phone was brought to St. Petersburg. One of the largest milestones in the partnership between Russia and Ericsson was the opening in 1897 of the first foreign factory of L.M. Ericsson with a full production cycle in St. Petersburg.

Corruption at Ericsson

Main article: Corruption in Ericsson

Employees and work at Ericsson

Main article: Employees and work at Ericsson

History

The history of the company began in 1876, and today Ericsson is a provider of telecommunications equipment and related services for mobile and fixed-line operators around the world. Ericsson equipment is used in more than 1000 networks in 180 countries, and 40% of all mobile calls are made using Ericsson systems. The company's product portfolio includes infrastructure equipment for mobile and fixed-line networks, professional services, software, broadband and multimedia services solutions for operators, the corporate sector and the media industry.

2024: Iconectiv sale to Koch Equity Development

On August 16, 2024, the Swedish company Ericsson, which is suffering losses, announced the conclusion of a binding agreement to sell its subsidiary Iconectiv. The buyer is Koch Equity Development LLC, and the transaction amount will be 10.6 billion Swedish kronor, or about $1 billion (at the time of signing the contract). Read more here

2022: Ericsson: Sanctions have become so many that the company cannot guarantee compliance with them all

Ericsson is committed to meeting all the requirements of sanctions and export regulation, but these requirements, laws and rules are complex, often change, and their number is constantly growing, so the company has not been able to comply with them all before, and for the future it cannot guarantee their full compliance. This is stated in the annual report of Ericsson for 2021, published in March^[2].

The political situation in some parts of the world, in particular in Ukraine, Russia and parts of the Middle East, remains uncertain, the level of sanctions remains high in the historical perspective and may increase even more. This leads to additional difficulties and risks for doing business abroad.

The universal element of these sanctions is financial restrictions applied to individuals and legal entities, but sanctions may also limit certain exports and lead to a complete trade embargo against some countries. In recent years, there has been an unprecedented attack on the global free trade system, and this has increased the risks of states adopting politicians and taking actions that violate agreements with the WTO, Ericsson notes in its annual report.

Ericsson believes there has been an unprecedented attack on the global free trade system in recent years

Continuing this trend could lead many countries to adopt regulatory changes that create trade barriers, price and currency exchange controls, import restrictions, and other policies that could ultimately limit Ericsson's operations and reduce its profitability.

Ericsson cites trade frictions between the United States and China as an example, which have led to additional trade restrictions and increased tariffs that could affect Ericsson's ability to successfully compete in the Chinese market or with Chinese companies. And export control measures and sanctions by the United States and the EU against Russia against the background of a military operation in Ukraine may affect the material ability of the company to do business in Russia and Ukraine.

The company notes that now there are shifts in geopolitical alliances, increasing competition in various areas around the world, and current military conflicts are superimposed on this, of which the conflict between Russia and Ukraine in Ericsson is considered the most significant.

It is not yet clear what this will lead to in the world, but we can expect that navigation in changing geopolitical geometry will become more difficult as old alliances break down and new ones form. These frictions, including trade restrictions, increasing sanctions and national security measures, can affect the state of the global market, and they remain a challenge for global supply chains in general and ICT in particular, Ericsson writes in its annual report.

2021

Purchase of telecommunications equipment maker Vonage Holdings for $6.2 billion

On November 22, 2021 Vonage Holdings , the company was announced to be sold Ericsson for $6.2 billion. We are talking about the largest purchase in the history of the Swedish manufacturer of telecommunications equipment. This acquisition will help Ericsson expand its portfolio of - 5G network solutions. More. here

Payment of $100 million compensation to Nokia for bribes in tenders

In mid-May 2021, telecommunications equipment manufacturer Ericsson reached an agreement with the Finnish company Nokia to pay compensation in the amount of almost $100 million for the supply of products as part of tenders won through bribery of officials. Read more here.

2020

Investing in a platform developer to run applications in Kubernetes Weaveworks containers

On December 8, 2020, Weaveworks announced the attraction of $36.65 million in investments as part of the Series C financing round, in which the fund of the main shareholder of AFK Sistema Vladimir YevtushenkovRedline Capital took part. Read more here.

Ericsson bought Cradlepoint for $1.1

On September 18, 2020, it became known that Ericsson bought the developer of wireless solutions Cradlepoint, which specializes in 4G and 5G networks. The deal is estimated at $1.1 billion. Read more here.

2019

5G Wireless Data Session Using Spectrum Sharing Technology with Qualcomm Technologies and Swisscom

An important stage in the promotion of 5G technologies was achieved in Switzerland on October 31, 2019. On this day, the first session of wireless data transmission using dynamic spectrum distribution (DSS) through the 5G network was successfully held. This was announced on November 15, 2019 by Qualcomm Technologies, which participated in this event together with Ericsson and Swisscom. Read more here.

Installing a 5G New Radio Data Connection with Qualcomm Technologies

On September 20, 2019, it became known that Qualcomm Technologies and Ericsson announced the achievement of another milestone in the development of the 5G standard. The partners established a data connection using 5G New Radio (NR) technology, in accordance with the global specifications of 3GPP 5G NR Release 15 in offline mode (SA). Read more here.

China launch of'smart' factory to assemble 5G equipment with robots

On September 17, 2019, Ericsson announced the complete automation of production at the plant in the Chinese city of Nanjing. Equipment for 4G and 5G networks, including base stations, only robots began to assemble there. There is also an automated packaging conveyor working with telecommunications solutions and launched back in the second quarter of 2019.

The renewal of the capacity of this factory took about a year and a half, about 500 million Swedish crowns ($52 million) were spent.

Erisson facility in Nanjing, China, where equipment production is fully automated

Ericsson's Nanjing facility uses artificial intelligence, machine learning and data analysis technologies that the company claims increase the efficiency and accuracy of manufacturing processes.

In addition, the lines for testing equipment with support for 5G technologies have been upgraded. This is done to improve the quality, increase efficiency and increase the flexibility of the company's entire 5G portfolio. To notify about failures and unforeseen situations, 45 workstations have introduced mobile Internet of Things technologies.

Ericsson supplies most of the products produced at the smart factory to Chinese operators. This equipment is used primarily to increase network capacity, rapidly deploy fifth-generation networks, and massively implement robotic systems. Ericsson predicts that operators in China will be launching 5G services at a rapid pace, and the company has braced for growing demand for new base stations.

Before the facility in Nanjing, the company automated its factory in Estonia, as well as began construction of a similar plant in the United States.^[3]

Ericsson is introducing robots into production to reduce labor costs, which are becoming more and more. The company considers the Chinese market to be very important, which is why cost optimization measures are being taken so actively against the backdrop of the trade war between the PRC and the United States.

Buying Niche AI

In mid-September 2019, Ericsson announced the acquisition of Niche AI. Financial and other terms of the deal were not disclosed. Read more here.

Construction of a factory in the United States where robots will produce 5G equipment instead of humans

On June 26, 2019, Ericsson announced the construction of its first fully autonomous factory. On it, equipment for fifth-generation networks (5G) will be produced by robots. Read more here.

Working with Renault and Orange to develop a vehicle interaction system via 5G

On April 30, 2019, it became known about the intention of Renault, Orange and Ericsson to work together on a system for interacting connected vehicles using 5G. Read more here.

Ericsson searches: the company is suspected of overpricing its 5G technologies

In mid-April 2019, it became known about searches in the Chinese offices of Ericsson. The company is suspected of overpricing its 5G technologies and abusing its market position.

According to The Wall Street Journal, citing an informed source, the Chinese State Administration for Market Regulation (SAMR) is conducting an audit at Ericsson's offices. The company itself confirmed to the publication the conduct of the investigation and reported that it was launched after receiving from unknown complaints about the company's practice in terms of licensing intellectual property.

China launches antitrust probe into Ericsson

The Telecompaper portal, referring to publications in the Chinese media, writes that the investigation concerns the licensing of patents that describe technologies for smartphones. According to the People's Post  and Telecommunications News, produced by the Ministry of Industry and Informatization of the PRC , after the introduction of devices with support for 5G networks on the market, manufacturers are likely to face an increase in royalties that they must pay Ericsson. Presumably, the Swedish company will demand deductions for the use of 5G technologies in addition to payments under previous standards (4G and 3G).

According to the SDxCentral portal, citing Chinese-language media, in January 2019, local mobile phone manufacturers complained to the regulator about Ericsson. They accused the Swedish vendor of excessive licensing fees and abuse of dominant market position.

Ericsson argues that when calculating payments for the use of patented developments, the company always adheres to a fair, reasonable and non-discriminatory approach (FRAND). Ericsson is helping the investigation in every possible way, a spokesman told the WSJ.^[4]

By March 27, 2019, Ericsson had about 49 thousand patents, and the number of new engineers involved in the development of innovations and technologies in two years exceeded 4 thousand. At that time, Ericsson signed 16 contracts for the supply of 5G communication solutions by a telecommunications operator - this is more than competitors, the Swedish company claimed.

The investigation into Ericsson became known two months after the company entered into a patent and licensing agreement with a Chinese smartphone manufacturer. The contract covers patents related to 2G, 3G, 4G and 5G communication technologies. At that time, Ericsson had more than 100 such agreements.

According to Tolaga Research analyst Phil Marshall, Chinese manufacturers have initiated an investigation into Ericsson to reduce deductions to the European company.

The Chinese authorities are checking Ericsson amid the fact that the representative of the Middle Kingdom Huawei faced a boycott of several countries that refuse to purchase telecommunications equipment for national security reasons. According to the American government, Huawei devices are used for espionage in favor of Beijing. Analysts at 'Oro estimated in Dell 2018 that Huawei is the world's largest maker of telecommunications equipment with a share exceeding 30%.

Huawei has many partners in China, including China Mobile

On April 17, 2019, Ericsson CFO Carl Mellander announced that the situation around Huawei has not yet affected orders. But he acknowledged that security issues could play a role in customers "decision-making.

Kathrein Antenna Business Purchase

February 25, 2019 Ericsson announced the acquisition Kathrein from the division for the production of antennas and filters for mobile communications. With this transaction, the buyer will strengthen his portfolio of products for fifth generation networks () 5G as antenna technologies become more important. More. here

2018

Revenue growth of 3% to 210.84 billion kronor; losses - 6.3 billion kronor

In 2018, Ericsson's revenue amounted to 210.84 billion kronor ($23.22 billion), which is 3% more than a year earlier.

Revenue in the division specializing in the sale of equipment to telecom operators amounted to 138.7 billion crowns ($15.27 billion), which is 5% more than a year ago. In the direction of digital services, revenues decreased by 2% to 38.1 billion crowns ($4.2 billion).

Financial performance

Ericsson wrote off 6.1 billion crowns (about $671 million) for the restructuring of the Business Support System, BSS which is part of the digital division. In addition, the company allows additional expenses in the amount of 1.5 billion crowns ($165 million) to cut jobs.

Ericsson remains unprofitable, although in 2018 the company's cash losses decreased by more than five times and amounted to 6.3 billion crowns ($694 million). The losses are caused by investments in equipment for fifth generation (5G) networks.

Despite the fact that the costs associated with strategic contracts and pilot trials of 5G will affect profitability in the short term, they will help achieve our goals for 2020 and 2022, as well as strengthen our business in the long term, - said Ericsson CEO Borye Ekholm, whose words are quoted in a press release.

According to the head, the company's revenue growth is largely due to an increase in demand for 5G technology from North American mobile operators.

In North America, Ericsson's revenue jumped 13% in 2018 compared to 2017, which was the highest among all regions. At the same time, most of the vendor's revenue fell on the countries of Europe and Latin America, the indicators for which Ericsson cites in the report in one line. Sales of the company in Europe and Latin America increased by 6%.^[5]

Nokia and Ericsson lose to Huawei despite Chinese company's troubles

At the end of December 2018, it became known that  Huawei's competitors - Ericsson and Nokia - could not take advantage of the failures of the Chinese company to strengthen their market position and develop advanced telecommunications equipment. More on this here.

Mobile networks in 11 countries shut down after Ericsson software failure

In early December 2018, there was a massive glitch in Ericcsson software, causing mobile networks in 11 countries to fail.

Problems with cellular communications, in particular, were observed in Japan and Britain. Thus, the Japanese operator SoftBank said that from 13:39 to 18:04 on Thursday, December 6, LTE services, fixed communications and SoftBank Air services were not available. The company has identified a fault in all packet switching equipment manufactured by Ericsson and used to organize mobile communications across the country.

In early December 2018, there was a massive glitch in Ericcsson software, causing mobile networks in 11 countries to fail.

The network malfunction of the British telecommunications company O2 occurred at about five o'clock in the morning of Thursday, December 6. By 9 am local time, the problem was partially resolved, but until the end of the day, users could not use the mobile Internet.

Among other things, the failure affected Transport for London, which manages the transport system of the British capital - electronic signage stopped working at some bus stops.

According to Ericsson CEO Borje Ekholm, the faulty software that caused the problems has been decommissioned, and the company is making every effort to reduce the negative impact from what happened and restore services to customers. Ekholm also issued an apology for the incident.

At the Technical Consultant and former director of the British media regulator Ofcom, William Webb, speaking to the BBC, expressed surprise that the problems were taking so long to fix.

An initial analysis of the causes of the failure showed an expired certificate in programs used by Ericsson clients. We are talking about two versions of SGSN-MME (Serving GPRS Support Node - Mobility Management Entity) software^[6]

Ericsson will equip Audi with 5G communication for the development of smart car production

In August 2018, Audi and Ericsson signed a contract under which the Swedish company will equip the partner's enterprise with 5G communication in order to develop smart car production. Read more here.

Losses for consecutive quarters. Huawei pushes the company to 3rd place in the industry

Ericsson has suffered losses for several quarters in a row. One of the reasons is the fall in demand for telecommunications equipment. Cellular operators have completed the construction of fourth-generation networks, and they will not begin the transition to 5G until 2019.

In addition, a high level of competition affects. Since 2012, Ericsson has slipped from first to third in telecom equipment sales, according to IHS analysts. In 2016, Huawei became the market leader with a share of 20.4%. The second place was taken by Nokia with a 14 percent indicator, and Ericsson's share was 12.5%.

Financial problems forced Ericsson to write off assets worth almost $2 billion in early 2018. Cash losses are mainly due to "investments directed at least 10 years ago and having little utility for the future of Ericsson's business," the company noted.^[7]

2017: Modernizing the Strategy

On March 29, 2017, Ericsson announced plans to adhere to a focused business strategy to accelerate technology development, strengthen market positions, and increase profitability.

Overall strategy:

• providing service providers with the opportunity to expand their business
• expanding sources of income.

Ericsson has planned to initiate the development of solutions that harness the potential of fifth-generation communications networks (5G), the Internet of Things (IoT) and cloud technologies^[8]

The return to profitability is the main goal, and in order to ensure the efficiency of operations, the company intends to focus on developing a portfolio of solutions that combine products and services that are more consistent with the needs of customers. There are plans to simplify the organizational structure, accelerate investments in R&D and service in selected areas.

For some time, the company has set itself tasks, the solution of which did not give the expected result. Reviewing the strategy, we carefully listened to the wishes of clients from around the world, as well as conducted an in-depth analysis of the portfolio and performance. Today we intend to focus on returning to profitability, as well as strengthening leadership in innovation and creating solutions in the areas that matter most to us. We intend to take action immediately and act quickly. Börje Ekholm, President and CEO of Ericsson

Portfolio change

The company has planned a number of actions that will allow it to focus on the portfolio of key solutions. Increased investment in core areas related to communications network equipment (Networks) to ensure continued deployment of 4G networks around the world and provide leadership in 5G. Network Rollout will give priority to Ericsson's own solutions. The company is aimed at optimizing comprehensive offers that cover all customer needs.

The company has formed the Digital Services line, combining virtualized network infrastructure and applications based on cloud solutions, software that provides resource management and monetization (OSS/BSS), as well as related service services. The goal is to return to profitability.

The revised strategy for providing Advanced Technical Support and Network Services (Managed Services) involves automating, maximizing the global presence and capabilities provided by OSS to ensure high-tech services and cost-effectiveness of operations.

The company creates two separate divisions - Ericsson Broadcast & Media Services and Ericsson Media Solutions.

The company continued to work on the rational use of the portfolio of traditional solutions. In combination with the above measures, this provides sustainable income, including from other areas.

Taking into account the announced measures and provided that the market is stable, we expect a significant improvement in indicators in 2018. I am confident that Ericsson can at least double the Group's 2016 operating profit margin less restructuring costs. More importantly, we will be able to provide return on raised capital and thereby increase the attractiveness of the company in the eyes of shareholders. Börje Ekholm

Current financial liabilities

As a result of the change in the Group's strategy, certain intangible assets were revalued in the first quarter of 2017, including capitalized development expenses in the Media and IT & Cloud segments. According to Ericsson's calculations, this will lead to a decrease in operating income in the first quarter by SEK 3-4 billion and will not affect the movement of cash. As a result of the planned pace of cost reduction, based on the current situation in March 2017, the company plans restructuring expenses in 2017 ~ SEK 6-8 billion against the previously announced 3 billion crowns, of which approximately 2 billion crowns will fall on the first quarter.

Provisions in Q1 2017

Reserves will reach 7-9 billion in the 1 quarter of 2017 and will be associated with the negative development of a number of projects.

Company structure

Ericsson announced changes to the organizational structure. A number of changes have been prepared to simplify the structure, improve efficiency, accelerate product launch and improve customer interaction.

The company has taken measures to increase the level of responsibility for the results of work and expand opportunities within the organization.

The structure of the company, the financial results in the plans are determined on the basis of a simplified model combining products and services. This is done to improve internal efficiency and meet customer needs and requirements.

The company's structure includes three business areas: Networks, Digital Services, Extended Technical Support Services and Managed Services, two separate divisions for the media business - Ericsson Broadcast & Media Services and Ericsson Media Solutions.

Instead of 10 regions, the company will allocate five markets:

• North America;
• Europe and Latin America;
• Middle East and Africa;
• Northwest Asia;
• Southeast Asia,
• Oceania and India.

A senior management team has been formed. She will take up her duties on April 1, 2017.

2016

Promotion of open solutions in telecom together with Red Hat

On November 1, 2016, Ericsson announced the creation of an alliance with software manufacturer Red Hat. The cooperation of companies involves the promotion of open source solutions in the telecommunications industry.

Ericsson and Red Hat have joined forces to develop new products that are built on OpenStack, NFV (Network Function Virtualization), SDN (Software Defined Networks), SDI (Software Defined Infrastructures), Linux containers, and are focused on working in the age of IoT, 5G networks, and other next-generation communications technologies.

Ericsson and Red Hat Team Up to Promote Open Products in Telecom

The companies will create joint hardware and software solutions, as well as cross-certify their products. For example, Ericsson Cloud Execution Environment, Ericsson Cloud SDN, Hyperscale Datacenter System 8000, as well as Ericsson Virtual Network Functions (VNF) applications will be certified for Red Hat Enterprise Linux and Red Hat OpenStack Platform and provided with appropriate reference architectures and laboratories.

Based on the results of the partnership, companies expect to offer telecom more open and effective solutions, freedom of choice and scalability. In particular, the partners intend to eliminate the threat of binding customers to side, proprietary software development branches. Red Hat and Ericsson engineers will address the challenges of their clients as part of the main branches of open source project development, which will give additional impetus to the development and distribution of technologies designed for scalable cloud environments, the companies said.

Partners will help customers adapt their staff, business processes and technologies to the new realities of the ICT market with Red Hat's Open Source consulting and education services, as well as Ericsson's extensive expertise in comprehensive consulting, system integration, service outsourcing and support.

Red Hat and Ericsson have experience working together to adapt Red Hat Enterprise Linux and Red Hat JBoss Middleware solutions to the needs and needs of Ericsson customers. At the new stage of cooperation, the companies will focus on OpenStack, NFV, SDN and SDI infrastructures, as well as Linux containers in order to form a new look of next-generation telecom technologies, the signs of which, in particular, will be:

• Work within the framework of Open Source projects. Red Hat and Ericsson have decided to jointly develop open source projects such as OpenStack, OPNFV and OpenDaylight in order to - unlike other providers - eliminate the threat of binding customers to side, proprietary software development branches. Red Hat and Ericsson engineers will address the challenges of their customers as part of the main branches of open source project development, which will give additional impetus to the development and dissemination of technologies designed for scalable cloud environments.

• Cross-certification and new collaborative solutions. As part of the launch of new joint solutions for NFV, SDN and SDI, Red Hat and Ericsson have begun work on joint plans for the development of software and hardware solutions, as well as a wide certification program. In particular, Ericsson platforms and solutions including Ericsson Cloud Execution Environment, Ericsson Cloud SDN, Hyperscale Datacenter System 8000, as well as Ericsson Virtual Network Functions (VNF) applications will be certified for Red Hat Enterprise Linux and Red Hat OpenStack Platform and provided with appropriate reference architectures and laboratories.

• In turn, Ericsson will introduce the Red Hat OpenStack Platform into its set of NFV solutions, offering customers from among service providers a fully open and flexible IT infrastructure. The companies also plan to make their joint solutions for NFV, SDN and SDI simpler and more convenient by developing appropriate deployment and management automation tools.

• A course towards the support and development of container technologies. Considering containers as a key element in the evolution of platforms, Red Hat and Ericsson will take an active part in the work of the relevant Open Source projects, including CNCF (Cloud Native Computing Foundation) and OCI (Open Container Initiative).

• The workloads developed by Ericsson based on Red Hat Enterprise Linux, including OSS/BSS applications, network function virtualization tools, media solutions and other components, will be certified for the Red Hat OpenStack Platform and will be provided by SLA agreements; Ericsson will support joint solutions.

Borje Ekholm - new CEO

On 26 October 2016, Swedish telecommunications equipment maker Ericsson announced the appointment of 53-year-old Borje Ekholm as the company's new CEO. Analysts were ambivalent about this appointment.

Borje Ekholm will officially head Ericsson on January 16, 2017, replacing Jan Frykhammar, who temporarily served as CEO of the company after the resignation of Hans Vestberg in July 2016.

Plans to close production in Sweden

On September 21, 2016, the Swedish press reported on Ericsson's plans to cut jobs en masse and curtail the production of telecommunications equipment in its native country. The company confirmed the layoffs and commented on information about the Swedish business.

Ericsson cuts staff and closes 140-year production in Sweden

According to the newspaper, Ericsson may close enterprises in the cities of Boros and Kumla, as a result of which the company will completely stop production of products that lasted about 140 years. About 1,200 people work at these plants, but layoffs will not be limited to these facilities: reductions are planned in other areas related to telecommunications equipment, including R&D departments.

As for the termination of production activities in Sweden, the company gave a mixed comment:

In Sweden, we have a big business that will not be excluded from the cost-cutting plan.

We are talking about a program announced in 2014. Then Ericsson set the task of reducing costs by 9 billion kronor ($1.1 billion) by 2017. Having curtailed production in Sweden and laid off 3 thousand people, the company expects to save about 3 billion kronor (about $367 million), Svenska Dagbladet notes.^[9]

A representative of one of the Swedish trade unions, Per Norlander, in an interview with a Swedish radio station confirmed that negotiations to close Ericsson production in Sweden were indeed underway, but as of September 22, 2016, they had not yet led to a final decision.

Resignation of CEO Hans Westberg

At the end of July 2016, Ericsson announced the resignation of Hans Westberg as CEO after 6.5 years in charge of the company. The departure of the head occurred against the background of a fall in quotations of the Swedish manufacturer of telecommunications equipment and increased competition. Read more here.

2015

Collaboration with Cisco

On November 9, 2015, Ericsson and Cisco announced the start of a strategic collaboration aimed at creating new generation networks. On this union, each of the companies expects to earn $1 billion over three years.

The partnership between Ericsson and Cisco involves the markets of the "Internet of Things," IP networks and fifth generation networks. The companies combine their capabilities in the areas of routing, network, mobile and cloud technologies, data centers, network infrastructure management and control, as well as global network services.

Cisco and Ericsson announce strategic collaboration

According to Ericsson CEO Hans Vestberg, the deal with Cisco will help the company strengthen its IP strategy and expand target markets that primarily concern Cisco's professional services, software and hardware sales. In addition, the cooperation should bring each of the partners at least $1 billion in revenue by 2018.

"This strategic partnership will be a key driver of business and revenue growth over the next decade," Ericsson said.

The Swedish telecommunications equipment manufacturer hopes to feel complete synergy from joint work with Cisco in 2018, and an increase in operating profit in 2016.

By the beginning of November 2015, Ericsson and Cisco accounted for a total of over 56 thousand patents, $11 billion in research and development investments, as well as 76 thousand specialists serving customers in more than 180 countries.

The financial terms of cooperation of the companies were not disclosed. Ericsson and Cisco only add that the companies intend to continue exploring new opportunities for joint business.^[10]

Interest in buying Alcatel-Lucent and Juniper Networks

On May 27, 2015, it became known that Ericsson could make a major takeover in response to the merger of competitors Nokia and Alcatel-Lucent. Juniper Networks is named among the potential purchase objects by the Swedish manufacturer.

The company is open to a merger and acquisition (M&A) deal, Bloomberg reported, citing sources familiar with Ericsson's plans. In June 2015, Ericsson CEO Hans Vestberg is going to hold a meeting with top managers, during which the company's strategy will be discussed. The key issue should be the possible steps of Ericsson in response to the acquisition of Alcatel-Lucent by Nokia for $16.6 billion, the publication reports.

Ericsson may make a major takeover in response to the merger of rivals Nokia and Alcatel-Lucent

Its knowledgeable sources say that at the end of 2014, Ericsson intended to offer Alcatel-Lucent management to sell the company. However, the Swedish vendor refused a possible deal, considering its consequences not favorable enough for itself. In particular, Ericsson's doubts concerned economic aspects.

In addition to acquiring Alcatel-Lucent, Ericsson considered the option of forming a joint offer with Nokia. According to its terms, the divisions of the French-American manufacturer can be divided between Ericsson and Nokia.

Representatives of the companies mentioned refrained from commenting. The head of the board of directors, Philippe Camus, only said that the company was in talks with many potential buyers before accepting Nokia's offer.

According to Ericsson Chairman Leif Johansson, he sees no reason to rule out a major deal, but there are not many companies left for it.

Sanford Bernstein analyst Pierre Ferragu considers it "natural" for Ericsson to acquire network equipment manufacturer Juniper Networks and fiber optic network equipment supplier Ciena. Ericsson itself, as noted by a Bloomberg source, doubts the appropriateness of the takeover of Juniper, given the increasing shift in demand for software solutions in the telecommunications industry.

Apparently, changes in the industry and the merger of competitors forced Hans Westberg to revise the business strategy. Earlier, the head of Ericsson said that the company intends to adhere to organic growth and buy only small developers.^[11]

2014: Ericsson rapidly ramping up off-telecom sales

As it became known in November 2014, Ericsson intends to continue to increase sales outside the telecommunications industry in order to correctly respond to the changes taking place in the global industry.

According to forecasts of Ericsson Chief Executive Officer Hans Vestberg, by 2020 the company will receive about 20-25% of revenue from sources that are not related to telecom operators. For comparison, in 2013 this figure was 10%, in 2008 - 5%.

Outside of the carrier business, Ericsson is involved in projects in security, utilities, digital television, transportation, cloud solutions, and intellectual property rights.^[12]

Ericsson is rapidly ramping up off-telecom sales

The Swedish company decided to differentiate its activities outside of telecom because the IT industry and the media industry are converging, and networks are becoming the lot of not only telecom operators, but also representatives of other markets. However, telecommunications equipment remains the largest business for Ericsson.

The manufacturer predicts that in the period from 2013 to 2017, the market for hardware solutions for telecommunications networks will increase annually by an average of 2-4%. Ericsson predicts similar dynamics indicators for telecommunications services markets and support solutions at 4-6% and 7-9%, respectively.

The forecast made was lower than what was announced by the vendor in 2013. Then the company expected an annual rise in the markets of telecommunications equipment, services and support solutions in the amount of 3-5%, 5-7% and 9-11%, respectively.

Trying to weaken its dependence on telecom, Ericsson launched a reorganization, as a result of which it is planned to reduce costs by 9 billion kronor (about $1.21 billion). As part of the ongoing business transformation, the company is going to streamline the product range and supply chain, reduce administrative costs, and also reduce jobs. The size of the planned layoffs is unknown. As of the end of 2013, the total staff of the company totaled about 114 thousand people.

2012

Loss of a major contract with the British O2

Ericsson has been fighting to maintain a market position for several years. In October 2012, the company lost a major contract with O2, Britain's leading mobile operator, due to repeated communication failures allegedly caused by Ericsson hardware errors.

Sony buys Ericsson's 50% stake in joint venture

In February 2012, Ericsson dropped its mobile phone partnership with Sony. Sony bought out Ericsson's 50% stake in the joint venture, becoming the full owner of Sony Ericsson's mobile business.

2011: Support for networks with a base of 2 billion subscribers

In 2011, Ericsson is one of the world's top five commercial software developers. A leader in 2nd (2G), 3rd (3G) and 4th (4G) generation mobile technologies, Ericsson supports networks with a total subscriber base of more than two billion people, occupying a leading position in the field of network management services.

2009

Verizon Wireless 4G Network Contract

In February 2009, Ericsson entered into a deal with the largest American cellular operator Verizon Wireless to create a fourth-generation network based on LTE technology.

Structure of the largest owners

The largest owners of voting shares as of July 2009:

• Investor AB - 19,42%
• Industrivarden AB - 13,28%
• SHB Pensionsstiftelse - 3%

^[13]

2008

Center in Silicon Valley

In 2008, the company opened a development center in Silicon Valley.

Year-end: Revenue of $31 billion

Financial performance (2008): revenue - $31.67 billion, net profit - $1.7 billion, capitalization - $33.8 billion.

2003: Henrik Swanberg leads Ericsson

In April 2003, Henrik Swanberg joined the telecommunications industry, leading Ericsson. I must admit: he chose the moment very successfully. His predecessor suffered a sharp drop in stock prices after the Internet bubble burst on the stock market (this happened in 2000-2001). One of Svanberg's first steps was the purchase of Ericsson shares for $11 million. As a non-poor person, Svanberg spent exclusively his own funds on this, thereby showing his personal responsibility for the financial situation of the company.

"I felt that communications was a growing and promising industry," he explained of his act, "and that I would be able to restore the profitability of the company, since I already had experience in crisis management in previous organizations where I worked."

Svanberg began to focus not on restructuring, which began back in 2001, but on expanding the business.

Swanberg's other priority was technological leadership.

employs 47,000 employees, of which 17,000 are engaged in research work - these are masters and doctors of science," he said in an interview with Vedomosti in 2004.

Three years later, in another interview with Vedomosti, he added that Ericsson invests 17-18% of sales revenue (about $4 billion a year) in research and development. Thanks to this strategy, Ericsson began to win large contracts.

After the restructuring was completed in the mid-2000s, the Swedish company acquired the assets of the British Marconi, which produces equipment for communication networks, and the American manufacturer of network routers Redbeck. In addition, Ericsson's asset portfolio was replenished at the expense of Tandberg and Mobeon, manufacturers of equipment for multi-service services (Internet access, television, etc.).

2001

Founding of Sony Ericsson JV

In 2001, on a parity basis with the Japanese Sony established the Sony Ericsson cell phone company. The agreement was concluded for 10 years. In 2011, Ericsson sold its stake in the company to Sony.

Ericsson's Share Dynamics in the Cell Phone Market

Mobile phone and smartphone sales leaders from 1992 to 2018 in animation below.

2000: 3G Communications Market Leadership

Ericsson is becoming the largest supplier of third-generation communication systems.

1917: Ericsson contemplates moving headquarters to Russia

By 1917, the factory had become Ericsson's largest manufacturing facility in the world. Cooperation with Russia was so successful that the founder of the company, Lars Magnus Ericsson, seriously thought about moving the company's headquarters to St. Petersburg. And although the revolution prevented the implementation of this plan, Ericsson's cooperation with Russia continued in subsequent years.

1900-1905: Opening an office in the United States

• 1900: Ericsson has 1,000 employees, sales reached 4 million SEK, 50 thousand phones were produced.

• 1902: Opening an office in the United States.

• 1905: First takeover in Mexico.

1881: First major contracts. Business start-up in Russia

Ericsson receives its first major contracts in Russia, Sweden and Norway.

Ericsson's history in Russia began on November 15 (in a new style) in 1881: it was on this day that Ludwig Nobel (brother and business partner of Alfred Nobel) signed a contract for the purchase of several telephones and a switch for the offices of the St. Petersburg company Nobel Brothers Oil Production Partnership from Lars Magnus Ericsson.

For more details see Ericsson Russia.

The deal with Ludwig Nobel was followed by the construction of the first telephone exchange in Russia - in Kyiv (1893), then in Kharkov (1896), Rostov (1897), Riga, Kazan and Tiflis (1900) and Moscow (1904).

1878: World's first single-tube telephones

Ericsson unveils world's first single-handset phones

1876: Telegraph Equipment Repair Workshop

Lars Magnus Ericsson establishes a telegraph equipment repair shop.

Notes