Ericsson exec confident about growth, managed services

Incoming Ericsson CEO Hans Vestberg said he is confident the company can outpace the wider infrastructure market, and also said the Swedish vendor's services business would continue to grow.

Vestberg, who will formally take over as CEO from Carl-Henric Svanberg at year-end, did not spell out how the company's equipment sales would fare in 2010 compared with this year, but remained bullish about Ericsson's momentum in the market, particularly due to its technology.

"Ericsson believes that telecoms is a growth industry ... we definitely should be able to grow faster than the market," he said in an interview with the Financial Times. In the third quarter, Ericsson's sales were down to $6.75 billion, off 6 percent from $7.15 billion in the third quarter last year.

However, the company's managed services business was a bright spot. The unit made up 40 percent of Ericsson's revenue in the quarter, and Vestberg said that number could grow to 50 percent in the medium-term. Even though the vendor has to take on costs in the beginning of a managed services contract, Vestberg said the business is profitable. In September, Ericsson began managing the day-to-day operations of Sprint Nextel's network, embarking on a seven-year contract worth $5 billion.

For more:
- see this FT article (sub. req.)
- see this FT article (sub. req.)

Related Articles:
Dell'Oro: Huawei grabs No. 2 spot in gear market
Ericsson's profit tumbles 71% in Q3
Incoming Ericsson CEO charts steady course
Ericsson takes over Sprint's day-to-day operations

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