Ericsson: We’re gaining share in wireless networks, own 50% of 5G market

Ericsson sign (FW)
Ericsson is one of the world's largest wireless network equipment suppliers. (Image: Monica Alleven/Fierce Wireless)

Ericsson’s CEO said the company has won roughly 50% of the world’s 5G contracts so far. He also said that Ericsson has reversed its declines in the global wireless network business overall, and during the second half of 2017 the company was able to gain share in the sector.

“We have been working hard to turn around the development,” President and CEO Börje Ekholm said in a release from the company. “It is therefore satisfying that we, after several years of decreasing market share, have started to increase our share, and doing so with improved gross margin.”

Added Ekholm: “2017 was a tough year with a continued declining market. We are far from satisfied with our performance and have taken a number of actions to turn around the development and improve profitability, to build a strong Ericsson for the long term.”

Overall, Ekholm explained that Ericsson is focusing on three main areas: decreasing the cost per gigabit, becoming fully digital, and finding new revenues. Further, he said the company is on track to save $1.2 billion annually by the middle of this year.

However, that goal remains below what some investors are hoping for. According to Reuters, investor Cevian Capital urged Ericsson to speed up its cost savings efforts.

Ericsson’s improving outlook on the global equipment market appears to align with an industrywide trend. According to new research from IHS Markit, the worldwide market for network equipment expanded by 15% in the fourth quarter of last year—and revenues in the space are set to grow by $25 billion over the course of the next five years.

But Ericsson’s statements on 5G don’t appear to line up exactly with those from some analysts. Analysts at Raymond James recently said that it’s too early to call winners, but clearly Ericsson, Huawei and Nokia dominate the wireless infrastructure market. Specifically, the Wall Street firm said Nokia has announced 50 5G trials, and Ericsson has signed 38 operator agreements.

Ericsson during its fourth quarter earnings report in January said that it is seeing increased momentum in 5G, including in North America, but it continues to struggle as the demand for LTE gear dwindles, reporting its fifth straight quarter of losses while announcing a shakeup in the executive ranks. Specifically, the Swedish vendor reported sales decreased by 12% in the fourth quarter, with sales decreasing by 10% for the full year 2017 in all segments. Its net loss was $2.4 billion for the fourth quarter.