Ericsson CEO: 15% of revenues in 2014 came from non-carrier customers

LAS VEGAS--Ericsson (NASDAQ: ERIC) said it is making significant progress in diversifying its customer base beyond wireless carriers. The company said that last year it derived fully 15 percent of its revenues from customers that are not wireless carriers, a number up from 10 percent in 2013 and 5 percent in 2009.

The company has targeted raising that figure to up to 25 percent in 2020.

"The solutions we have would work for other industries as well," said Ericsson CEO Hans Vestberg, explaining that the network technologies Ericsson has built for wireless carriers could now be used by a wide variety of corporations including those in the media and TV space, utilities and elsewhere.

Ericsson's move to expand beyond wireless carriers comes as little surprise. Other major network infrastructure vendors like Alcatel-Lucent (NYSE: ALU) and Nokia (NYSE:NOK) are pursuing similar tactics, partially due to slowdowns in network buildouts by wireless carriers but also in response to the increasing importance of cloud and network connections in businesses of all types.

Indeed, late last year Ericsson announced it plans to cut costs by $1.21 billion (9 billion Swedish kronor) by 2017 and will slash jobs as part of that effort, though the vendor did not say how many positions it will cut. The cost cuts are part of Ericsson's larger strategic transformation toward software, media and working with customers that are not telecommunications carriers.

At the time, Ericsson said it would target non-carrier customers in the cloud, IP networks, TV and media and OSS/BSS segments.

During an interview here on the sidelines of the Consumer Electronics Show, Vestberg told FierceWireless that the transition for Ericsson beyond telecommunications customers is noteworthy considering the company has primarily build voice networks for telecommunications providers for the past 100 years. Nonetheless, he said Ericsson is making progress toward its goal.

Specifically, he said the company has signed up a number of non-carrier customers in Europe, primarily in the media and TV space. He said those industries fit well with Ericsson's technology since media and TV companies must deal with and transmit enormous amounts of video data.

Vestberg also said Ericsson is making headway in the utilities space by providing systems integration services for the construction of smart grids. Vestberg also mentioned public safety and transport as two other segments where Ericsson has made progress in signing up customers from outside its traditional telecommunication carrier customer base.

To be clear though, Ericsson remains largely focused on the mobile networks space. Here at the CES show, the company is showing off a wide range of technologies aimed at easing the rollout of mobile networks and improving those networks. And, perhaps more importantly, Ericsson believes the wireless infrastructure market will continue to grow: The company last year said it estimates that the total network equipment market will grow at a compound annual growth rate of 2 to 4 percent from 2013 to 2017.

Related Articles:
Ericsson's Qureshi looks to M&A to tap new markets
Ericsson expects 6.1B smartphone users worldwide by 2020
Ericsson to cut costs and jobs in push to cloud, software and non-carrier customers

Suggested Articles

Norway’s Telenor ditched Huawei in favor of Ericsson for 5G RAN, but Telefónica tapped the Chinese vendor for 5G RAN in Germany and 5G core in Spain.

Samsung Electronics is expanding its North American presence in wireless infrastructure, striking a deal with Canadian telecom operator Videotron.

AT&T said its 5G service, for both consumers and businesses, is now live in 10 markets.