Ericsson India revenue plunge heavily in Q3 due to delayed spectrum auctions, employee count down

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Ericsson, the Swedish telecom gear maker, posted 28% decline in its India revenues for the third quarter of 2016 at SEK 2.59 billion or $292 million or Rs 1,890 crore, due to delayed spectrum auctions which have delayed telecom operators’ investments for several quarters, the company said.


The company had posted SEK 3.6 billion in sales during the same quarter last year. The third quarter revenue however has increased 7% sequentially.

“The delay in spectrum auctions, which closed early October, negatively impacted mobile broadband investments in the quarter,” Jan Frykhammar President and CEO, said in the statement. The company however added that professional services continued to be stable. Ericsson India’s network business fell 44% at SEK 1.4 billion or Rs 1,100 crore. Sales from global services stood at SEK 1.1 billion, up 3% while support solutions brought SEK 0.1 billion in sales during the quarter.

The telecom equipment maker said that decline in networks sales decline was driven by markets with a weak macro-economic environment, impacting both mobile broadband coverage and capacity sales. India remained Ericsson’s third-largest to revenue contributor worldwide at 5%, after China with 8% and the United States with 26%.

The company’s India employee count went down from 22,541 in the second quarter to 22,340 in the third quarter, the company’s financial statement revealed. The global workforce count also went down to 113,797 in the third quarter from 116,507 in the second quarter.

“Ericsson is currently in the middle of a significant company transformation. In addition, the rapid technology development, different and new customer requirements, as well as the convergence of IT, Media and Telecom, are posing both challenges and opportunities,” Frykhammar said.

He said that the company’s focus is on speed and fine-tuning of execution, supported by the new company structure which is designed for efficiency and effectiveness.

“In short, the strategy builds on three key elements; efficiency and scale of our core business, investments in new revenue base and strong cash flow generation. Combined this will enable us to secure leadership also in the emerging broader 5G market – from technology to new business models and services – enabling us to be a strong business partner to existing and new customers,” he added.

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