[ad_1]
In another galaxy, far from here, there is a roundabout. Next to him, a glass entrance. And in there, intelligent life. But a reality that does not resemble ours in the least. This is Ericsson, one of the largest companies in Sweden.
In the midst of a fiery pandemic and, literally, a fiery climate crisis, our world has been put to the test, especially economically. Factories closed for corona, unavoidable travel, digitization and electrification have resulted in profits, layoffs, layoffs and canceled dividends. And, perhaps worse, the future beyond the pandemic appears highly uncertain.
But not inside Ericsson’s glass office. There seems to be what can best be described as 5G dizziness. Contracts are signed on an assembly line. When CEO Börje Ekholm presented Ericsson’s quarterly report on Wednesday, he spoke of 113 contracts for 5G equipment, while there were 112 in the power point image, which should probably be fairly recent production.
Easier for Ericsson to grow
The United States is fully expanding the next generation of mobile networks. Europe is on the way, most recently Sweden, where the Swedish Post and Telecommunications Agency announced yesterday which telecom operators will be able to participate and fight for the 5G space.
On Tuesday, Sweden also became another country that excludes Ericsson’s main competitor, China’s Huawei, from the 5G expansion. This is so that the Chinese state cannot access the data on the networks.
In the past, Ericsson’s largest market, the United States, has done the same. This has probably made it easier for Ericsson to grow and accept new contracts, with higher profitability.
Börje Ekholm enthusiastically denies that Ericsson has benefited in any way by avoiding Chinese competitors in important markets. He says Ericsson mainly took market shares from competitors other than Huawei.
It may be worse if you are not allowed to sell to China at all
You have good reason to point this out. China is an important and profitable market for Ericsson and, above all, a growth market for 5G. As early as Wednesday, China reacted to the Swedish 5G ban on Chinese providers.
It may be far worse for Ericsson not to be allowed to sell to China than to be without Chinese competitors in the United States and parts of Europe. It can also delay 5G expansion.
Swedish telecoms operators that will be allowed to operate 5G networks should, in addition to ordering from, say, Ericsson or Nokia, also make sure to recall the Huawei and ZTE equipment they already have, by 2025.
Telia, which also submitted its interim report on Wednesday, announced that Ericsson and Nokia will build their 5G network. Therefore, they are not affected at all by the Huawei and ZTE ban, according to the CEO.
Telia has been adversely affected by the pandemic
But they have Huawei equipment on the transmission network. What it takes to get rid of it can’t Telia can’t respond today, but says it’s “limited impact.”
Telia has been adversely affected by the pandemic when it comes to roaming and television advertising, but it will now remain an extraordinary general meeting for shareholders to receive the full dividend anticipated prior to the pandemic.
Ericsson happily distributed the full dividend as planned this spring.
And the earnings announcement means it looks brighter than it has in at least a decade. Gross margin took a giant leap to 43 percent. This is the highest since 2006, when Ericsson recovered well from its worst crisis. Those who got the then Ericsson boss to name the glass office rotunda in Kista “Ericsson Turnaround”.
