Ericsson can ill afford missteps in North America after executive abruptly left: analysts

Ericsson
Swedish vendor Ericsson announced the sudden departure of Rima Qureshi, head of the North American market, last week.

Speculation about Ericsson’s relationship with Cisco is heating up after the sudden departure last week of Ericsson’s head of the North American market, Rima Qureshi.

Without saying where Qureshi is headed next, Ericsson said she left May 11 “to pursue another opportunity in the industry.” Ericsson immediately appointed Niklas Heuveldop, senior vice president, chief strategy officer and head of Technology & Emerging Business, to take over her position until a permanent replacement is recruited.

A company spokesman had no further information to disclose as of Friday.

Qureshi was named head of Market Area North America on April 1, 2017. Prior to that she was head of Region North America from July 2016 to March 2017, and prior to that she was chief strategy officer. She started at Ericsson in 1993.

As chief of strategy at the time, Qureshi was a central figure in negotiating Ericsson’s partnership with Cisco, which was announced in November 2015 with the goal of generating $1 billion in new revenues by 2018. However, at this year’s Mobile World Congress, Qureshi told European Communications that the two companies were working on ironing out several difficulties associated with the partnership, including “confusion” caused by overlapping portfolios.

“The next step for Ericsson regarding who replaces Rima Qureshi in North America is a very big deal,” Ovum analyst Daryl Schoolar, a contributor to FierceWireless, told FierceWirelessTech. “In 2016 the North America regions was nearly 25% of total company revenues. This is the largest single region, by revenue, for Ericsson. Given how things have gone recently for Ericsson the company can’t afford to make a misstep in this region. Plus Rima had responsibility for the company’s high-profile relationship with Cisco; that gives extra weight to the importance of making the right choice to replace her.”

Ken Rehbehn, principal analyst in 451 Research’s Networking Channel, said the removal of Qureshi from her position as chief strategy officer was a bigger deal. Not an Ericsson native, but having come in via the Northern Telecom acquisition, she helped the company to think differently and guided the Cisco strategic partnership. “Ericsson's silence on the future of the Cisco partnership as she departs puts that relationship in doubt,” he said.

However, without Rima, the Ericsson machine in North America will chug on quite satisfactorily, Rehbehn said. For any of the multinational suppliers, head of region is an important role for setting broader strategic direction and contending with major issues that pop up. “But the reality is that heavy lifting comes from well-established and trusted account leadership at large customers such as Verizon, AT&T, Sprint and T-Mobile,” he said.  

Phil Marshall, chief research officer of Tolaga Research, said the North American market is very important for Ericsson, and whoever succeeds Qureshi needs to be an executive who is well-known in North America. “I think it would be a mistake to helicopter in an executive from Sweden or another market,” he said.

Earl Lum, president of EJL Wireless Research, agreed, saying that putting someone who isn't domiciled in North America in charge would be a mistake. Given the recent absorption of Alcatel-Lucent by Nokia and Samsung continuing to move forward with trying to break into Verizon, losing any market share in North America would be bad. "NA is crucial for Ericsson as a market," he said.