Ericsson’s Q1 Earnings Boosted by Strong 5G Sales in India

Ericsson, the Swedish telecom equipment manufacturer, has reported that strong 5G equipment sales in markets such as India have boosted its earnings for the January-March 2023 quarter, despite sales in more established markets experiencing a decline and eroding margins. India is now Ericsson’s second-largest market by net sales, accounting for 11%, second only to the US, which accounted for 37% of net sales in the first quarter of FY24.

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According to Ericsson’s Chief Financial Officer, Carl Mellander, “India is strong and a good example where our sales are up five times.” India’s share by net sales grew to 11% in the January-March 2023 quarter from 6% in the October-December 2022 quarter.

Ericsson reported net sales of 62.6 billion SEK (Swedish Krona) or $6.08 billion for the three-month period, an increase of 14% from 55.1 billion SEK ($5.35 million) from the same period last year. However, earnings before interest and taxation fell to 3 billion SEK ($290 million) from 4.7 billion SEK ($460 million) a year earlier.

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Börje Ekholm, President and Chief Executive of Ericsson, stated that “as expected, customers in early 5G markets have slowed the deployment pace somewhat. Our effect on sales is bigger as some customers have also lowered the elevated inventory levels built up in a tight supply environment.”

Ericsson’s large roll-out projects in markets such as India did not fully offset the sales impact from early 5G markets. Since October 2022, Indian telecom providers, Reliance Jio and Bharti Airtel, have started the rollout of their 5G networks in India. The two have since launched 5G services in more than 900 cities and towns in the country and deployed over 140,000 5G base transceiver stations (BTSs).