Ericsson CEO Hans Vestberg reiterated that 4G and 5G technologies are key to the vendor's strategy for 2016, but noted that the company needs to begin reaping the rewards of recent investments in fields including software.
In a presentation to shareholders at Ericsson's AGM, Vestberg said the company would continue to seek out opportunities for global 4G equipment sales during 2016. The CEO acknowledged that market conditions for infrastructure sales remained challenging in some markets, but suggested that the broader market for ICT transformation is poised for rapid development in the coming years.
"ICT opens up new possibilities for people, business and society -- and the pace of change will never be as slow as it is today," Vestberg said.
The CEO explained that 5G is another strategic priority for Ericsson in 2016. The company will seek to build on its progress in developing the technology, which to date has seen it win 21 related operator contracts globally, and achieve data rates in excess of 25 Gbps at a 5G test-bed.
However, Vestberg also hinted at caution in the vendor's investment strategy in 2016, telling shareholders that Ericsson needs to improve earnings in targeted areas including software sales and recurring business following a period of investment in those fields.
"Just like our industry and customers, Ericsson is on a transformation journey. Our Networked Society strategy requires us to excel in our core business and establish a leadership position in targeted areas," he said.
In a statement, the company explained that its core business consists of radio, core and transmission networks, and telecommunication services. Its targeted areas include cloud, IP networks, TV and media, OSS/BSS, and industry and society.
Ericsson derived 18 per cent of its 2015 revenues from those targeted areas, it stated. Overall, net sales grew 8 per cent year-on-year to SEK246.9 billion (€26.9 billion/$30.2 billion) through 2015. Operating income grew 30 per cent year-on-year to SEK21.8 billion, and cash flow increased 10 per cent to SEK20.6 billion.
Vestberg said the vendor's focus on core and targeted areas will enable Ericsson to "continue to lead our industry and create new opportunities for growth."
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