Ericsson Chinese Business Sees Decline Contrary to Analyst Predictions

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Ericsson

Ericsson is one of the biggest players when it comes to telecom equipment manufacturing. The company like its many other rivals has a presence all over the world, including in India, China, and the USA. In India and the USA, the growing concern over security has led to a ban on Chinese vendors. While it is not as stringent in India, the heat is more strongly felt in the USA. However, in a totally upturned situation, Ericsson, the Swedish manufacturer has reported falling earnings in its Chinese business. It is worth noting that Ericsson had been expected to perform well in its second core quarter, earning report. But, contrary to that, Ericsson has reported a fall in earnings. Which is a first in the last three years.

Company Misses Out on Earnings from China

The Swedish company, Ericsson reported earnings of 54.9 billion Swedish crowns as compared to the 57.2 billion crowns as the analysts had predicted for the company. But, it is also important to understand the reason for this happening. In China, the tenders which were to be rewarded for telecom equipment did not come out in the present quarters which meant that Ericsson could not finalise the sales in the mainland.

This is also what Carl Mellander confirmed to Reuters, ET Telecom reported. As for the sales in the other areas, Ericsson reported that the sales had risen by 8% but in the Chinese mainland, the telecom equipment faced a decline of 2.5 billion crowns.

Ericsson to See Lower Earnings in China from Now On

Mellander also added that it is wise to expect lower earnings in the Chinese mainland from now on. It is worth noting that Ericsson makes around 10% of its revenue from its Asian branches. On the flipside, Nokia and Ericsson has surely grown leaps and bounds in the absence of ZTE and Huawei in the market. Ericsson has also inked a massive deal with Verizon to deploy 5G technologies in the USA.

Reported By

Junior Editor

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in international relations and diplomacy.

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