Ericsson reported strong results for the second quarter, with its sales and profit margins beating analysts' expectations. The Swedish vendor expects a better sales and business mix in the second half of this year and is riding stronger growth in network-capacity projects, which are more profitable than network buildouts.
Ericsson grew net income by 76 per cent year-on-year in the second quarter of 2014, as political unrest that affected sales in some of its Middle East and Africa operations was offset by strong sales in China and India.
Despite rumors that Tier 1 operators AT&T and Verizon may be talking to Ericsson about outsourcing the management of their networks, Ericsson CEO Hans Vestberg said that is a very unlikely scenario because those operators have size and scale and a history of doing it themselves. "I wouldn't believe they would outsource their networks," Vestberg said during an interview with FierceWireless.
Cisco CEO John Chambers and Ericsson CEO Hans Vestberg may have very different management styles but one area where they are similar is that they claim to always be thinking five to 10 years into the future.
ASPEN, Colo.--Do not look for Ericsson to follow its competitor Alcatel-Lucent and outsource any of its research and development. In an interview with FierceWireless, Ericsson CEO Hans Vestberg called the company's R&D efforts Ericsson's "heart and brain," and he said that he would never outsource the firm's core business.
Ericsson has appointed Arun Bansal as senior vice president and head of the radio business unit, while Anders Lindblad (pictured) is appointed senior vice president and head of the cloud & IP business unit. Both appointments will be effective from July 1.
Ericsson has appointed Rima Qureshi as group chief strategy officer with effect from May 1, and said the executive will also drive the company's mergers and acquisitions (M&A) strategy in future.
Highlighting the growing need for traditional telecom infrastructure providers to develop technology solutions involving virtualization, Ericsson is splitting its former networks division in two, creating one unit targeting just radio and another solely focused on cloud and IP.
Ericsson reported lower first-quarter sales but higher gross margins and profits as it focused on more lucrative contracts. However, the company saw a sharp 23 percent fall in revenue from North America, as large LTE coverage buildouts have peaked.
Ericsson said sales declined by 7 per cent to 47.5 billion krona (€5.2 billion/$7.2 billion) in the first quarter of 2014 compared to the previous year when adjusted for currency, although the Sweden-based equipment manufacturer said efforts to improve its profit margin are having a positive impact.