Swedish multinational telecommunications giant Ericsson has recorded losses for a fifth quarter running, with a decrease of 12% in sales for the fourth quarter of the last year. The company cut 10,000 jobs in the quarter and two top executives are set to leave.
For the whole year, sales decreased by 10% in all segments. The falls have been due to the lack of demand for LTE equipment as the momentum towards 5G grows.
Ericsson reported a net loss of 18.9 billion Swedish kronor (US$2.4 billion) for the quarter. It had a 1.6 billion kronor loss in the corresponding quarter a year ago, largely due to asset write-downs which were announced a fortnight ago.
Chief executive and president Börje Ekholm said robust measures had been taken during 2017 to deal with multiple challenges, and reduce cost and commercial risk. But he made no bones about the loss, saying, "The result is however far below our long-term ambition."
{loadposition sam08}He said the losses in the Digital Services division were expected but not acceptable.
The head of the Business Area Digital Services, Ulf Ewaldsson, will leave the executive team from this month onwards and act as an adviser to Ekholm. The head of Group Function Sustainability and Public Affairs, Elaine Weldman, is also leaving.
The company shed about 17,000 jobs, both full-time and contractors, in 2017.
Ericsson has to contend not only with Chinese giants Huawei and ZTE, but also Nokia which is pushing for early 5G market share in China.
The Wall Street Journal quoted figures from IHS Markit showing that the company was now third in the US$126 billion global telecoms market, with 12.5% market share. Huawei was at the top (20.4% market share) followed by Nokia with 14% after its acquisition of Alcatel Lucent. Chinese vendor ZTE was fourth, and rising, with 9.2%.
There was some good news ahead; Ekholm said that the Radio Access Network equipment market was estimated to decline by 2% for the full-year 2018, compared to an 8% decline in 2017. The Chinese market was expected to continue to decline due to reduced LTE investments, while there was positive momentum in North America.