Ericsson outlines targeted areas for growth and financial strategy

High-level, long-term strategy beyond 2015 will focus on investments in growth areas such as IP, OSS, BSS, TV and media, and modems, along with evolving the infrastructure software model to fit an ICT environment

Ericsson outlines targeted areas for growth and financial strategy

Ericsson estimates the total telecom network equipment market will show a CAGR of 3-5%, telecom services a CAGR of 5-7%, and is forecasting the market for support solutions to show a CAGR of 9-11% in the period 2012-16

The figures were presented yesterday (6 November 2013) at Ericsson’s annual Investor Day by president and CEO Hans Vestberg (pictured), who gave an update on the company's strategy execution and, for the first time, gave an overview of Ericsson's longer term strategy, beyond 2015.

Vestberg described the company’s key priorities for 2014 for achieving profitable growth combined with continued focus on cost and efficiency, and strengthened commercial excellence.

Key ingredients in this plan include monetising the investments in footprint that the company has established in Europe, continued structural improvements to shorten order-to-cash cycle time, and to evolve the infrastructure software model to fit an ICT environment.

Vestberg said: "Looking at sales growth in a longer perspective, it is encouraging to see that we grew twice as fast as the market in 2010-2012, currency adjusted. This is proof that our strategy is effective and that we are delivering real value to our customers."

Looking beyond 2015, he said Ericsson will leverage its core assets: the combined strength of its technology and services leadership and its global scale, which enables investment decisions in targeted areas for growth, such as IP, OSS, BSS, TV and media, and modems.

"Our market leading position gives us a unique opportunity to work with the most successful customers around the world. Our leading position in North America, currently the most advanced ICT market in the world, gives us a head start in understanding the changing industry landscape. As our customers' businesses transform, our job is to make sure that we continue to turn our global experience and leading technology into attractive and relevant solutions, driving greater profits for them," stated Vestberg.

In addition to Vestberg, Ericsson's CFO and executive vice president Jan Frykhammar discussed financial metrics, as well as elaborating on how sales came under some pressure in the third quarter. He reiterated that this is mainly due to FX (financial exchange) headwind combined with lower activity in three large projects in North America and Japan.

In light of the current FX headwind Ericsson is experiencing, Jan Frykhammar put special focus on describing the company's FX strategy. "With strong cash flow, we will be able to invest in profitable growth, maintain a stable dividend and ensure a strong cash position to attract new business," he said.


Written by Wireless magazine
Wireless magazine

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