Ericsson Pushes for Enterprise Business as Q4 Earnings Jump

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Emma Okonji with agency report

Ericsson predicted its enterprise segment would eventually outstrip its mobile infrastructure business in growth and profitability, as it reported improved Q4 earnings despite the continued impact of a decline in China.

CEO of Ericsson, Borje Ekholm, who gave details of the enterprise expectation in Ericsson’s Q4 and full year 2021 earnings statement, noted the shift would happen over time.

Executive Vice President (EVP), Business Area Networks at Ericsson, Fredrik Jejdling told Mobile World Live it had a number of strands to its enterprise strategy, including selling private networks in collaboration with operators and creation of a global platform.

He said there was an expected ‘big growth rate’ ahead from private and mission-critical network deployments, which it is “completely focused” on working with operators on rather than direct to businesses.

More generally, Jejdling added the use of 5G in enterprise also benefitted the wider business, as it would require continued densification of mobile networks.

In Q4, the company struck a big money deal to acquire cloud communications services provider Vonage, as part of its plan to address an emerging communication platform-as-a-service segment.

The creation of a global network platform, Jejdling added, will “expose great use cases” for enterprise, further expanding the segment.

Ericsson booked a net profit of SEK10.1 billion ($1.1 billion) in Q4 2021, up 41 per cent year-on-year. Revenue increased 3 per cent to SEK71.3 billion.

As in Q3, its earnings growth was blunted by declines in mainland China. Ericsson estimated its sales in the country during the final quarter were SEK1.8 billion less than Q4 2020.
Commenting on the performance of its networks business, Jejdling said it continued to gain market share outside of China.

Looking to 2022, he noted the company saw opportunities in densification and mid-band 5G deployments in markets already developed in the next-generation technology, while expecting growth in early-stage deployments from operators in areas including Latin America.