Ericsson claims it’s turned around and is on the road to full recovery

• It asserts it’s leading the way in 5G commercialisation and enjoyed a financial turnaround in 2018
• In fact, while some numbers looked good, last year it increased sales by just 1%
• It’s now confident that it’s returning to growth

After years of disappointing financial performances, Ericsson is talking up a barely discernible ‘turnaround’ in its fortunes. Speaking at Ericsson’s AGM this week, president and CEO, Börje Ekholm, maintained that Ericsson was already leading the way in 5G commercialization and characterised Ericsson’s 2018 ‘vendor experience’ as one of “financial turnaround, increased efficiency and customer centricity.”  

But if there was a turnaround for Ericsson it was a very gentle one and mostly characterised by fluffy words, not hard numbers.

According to Ekholm, Ericsson had delivered on its strategy and has become a more focused, customer-centric and agile company. "We can look back at 2018 and say that we succeeded with our ambitions. Our focused strategy in combination with hard work has led to tangible results," he said.

OK, about those tangibles...

He said Ericsson had announced 16 commercial deals with named service provider customers for 5G networks, more than any of its competitors.

"We are well prepared to make the switch to 5G as easy as possible for our customers. The Ericsson Radio System hardware has been 5G-ready since 2015 and can be used also for 5G NR with a remote software installation. In fact, we have shipped more than 3 million 5G-ready radios to our customers worldwide, giving our customers a strong platform for launching 5G," said Ekholm.

Yes, yes, we know all that. How much dosh did you actually make last year?

Ericsson says 5G build out is happening all over the world, but in Europe it’s happening at a slower pace. More than half of Europe has yet to allocate the licenses that operators need to make the 5G networks reality.

Now the excuses...

"The process for spectrum allocation in Europe is often aimed at maximizing the revenues from licenses. Instead, the process should focus on the value created by a digitalized society and how that contributes to the overall competitiveness of a country," said Ekholm

Numbers!

For the full year 2018, Ericsson's reported net sales increased by 1 %, to SEK 210.8 billion. The reported operating income was SEK 1.2 (–34.7) billion. The gross margin was 35.2 %.  

Thank you