Ericsson CEO upbeat, others predict huge consolidation

Having dramatically missed its Q3/07 forecast, Ericsson's CEO, Carl-Henric Svanberg, remains positive about the company's future prospects with emerging markets being seen as the major driving force.

"Every industry could be impacted by the global economic slowdown, but in telecommunications infrastructure, a large portion of business is in emerging markets where they are still building out mobile telephony. We are playing an important role there and we don't see any impact there, at least yet," said Svanberg.

Meanwhile, in Europe, Ericsson believes that there is growing excitement with regard to services uptake. "Operators are seeing increases in data traffic of 50 per cent up to 1,500 per cent, but it varies a lot depending on the forcefulness of the operators."

However, George Bailey, GM of IBM's electronics industry, is less confident about the future for infrastructure vendors. "The current industry is not sustainable and the levels of profitability are pathetic. Cisco is exempt from that, operating as it does at 4-5 times the industry average, and Ericsson has separated itself from the pack somewhat, but even these two are facing problems."

Bailey thinks that pressures on service provider business models, as well as competition from low cost players, will lead to further consolidation amongst infrastructure players. IBM's research shows Cisco, Ericsson and Huawei to be occupying the top spots in terms of scale, operating margins and revenue growth.

For more on this story:
- read BusinessWeek and Mobile Europe

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.