Ericsson Reports Strong Sales Growth in India Amid Decline in North American Market

Ericsson Reports Strong Sales Growth in India Amid Declining North American Market

Swedish telecom gear maker Ericsson showcased a robust performance in India, which helped offset the expected softening in other markets, notably North America, according to the Q2 2023 earnings report released on Friday. The company highlighted its record build-out speed in India, where it has now secured a leading market share.

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Growth in Enterprise Segment

While overall group organic sales experienced a decline of -9%, a -13% decline in Networks was partially mitigated by a remarkable 20% organic growth in the Enterprise segment.

“Sales growth in India partly offset the expected softening we saw in other markets, notably in North America, where build-out pace moderated and customer inventory levels were reduced,” said Borje Ekholm, Ericsson’s President and CEO.

The telecom giant also announced the successful landing of another important 5G licensing agreement with a device vendor. This achievement further strengthens Ericsson’s intellectual property rights portfolio, positioning the company for continued growth in licensing vendors who were previously unlicensed for 5G technology.

In the Cloud Software and Services division, Ericsson expressed confidence in achieving at least a break-even EBITA (Earnings Before Interest, Taxes, and Amortization) for the full year 2023.

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However, the earnings report revealed a net loss of SEK -0.6 (4.7) billion, primarily attributed to restructuring charges. The company’s EBITA, excluding restructuring charges, stood at SEK 3.7 (7.5) billion, with an EBITA margin of 5.7% (12.0%). Reported EBITA was SEK 0.5 (7.5) billion, including restructuring charges amounting to SEK -3.1 (0.0) billion.

India has become Ericsson’s second-largest market

Despite the challenging financials, Ericsson said it remains optimistic about its position in India, where the company experienced continued momentum. India has now become Ericsson’s second-largest market and amongst the top 5 countries in net sales, contributing 14 percent to net sales in Q2, just behind the United States.