Ericsson embarrassed in its back yard over LTE deal

Ericsson continues to take a beating in its own back yard. The world's top infrastructure player lost out again to Huawei for an LTE contract awarded by Tele2 Sweden and the Swedish business of Norway, Telenor.

The two operators used their joint wireless network venture, Net4Mobility, to award the contract. The two plan to offer commercial LTE services next year. The goal is to cover 99 percent of the Swedish population by the end of 2013, starting with densely populated areas.

The deployment will also include increasing the number of base stations for 2G voice traffic by 30 to 50 percent, with enhanced indoor and outdoor coverage across the country as a result.

Earlier this week, Swedish operator TeliaSonera launched the world's first commercial LTE services in Oslo, Norway and Stockholm, Sweden - the Stockholm network being provided by Ericsson, while Huawei won the contract in Oslo.

Commenting on the lost deal, Mikael Backstrom, head of Ericsson Nordics and Baltics, said, "We are disappointed that we did not manage to reach an agreement with Net4Mobility. In the negotiations, we went down as far as we could in price, but it was not enough."

Analyst David Hallden with HQ Bank said Ericsson risks lower profit margins if it cuts prices to defend its market share from Huawei, adding that the company may have no choice but to accept lower-priced contracts because it needs to sell equipment in order to secure service deals, which are getting increasingly important

For more:
- see this Telegeography article
- read this Total Telecom article

Related articles:
Huawei scores in Europe with LTE
Vodafone draws Huawei into mobile core R&D lab
Telenor picks Huawei for 4G upgrade, rejects Ericsson and NSN
Huawei makes play for LTE patent leadership

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