Ericsson's Vestberg pleased with vendor's revival and transformation, sets his sights on 5G

Ericsson (NASDAQ: ERIC) CEO Hans Vestberg has seen the company come a long way. He recalled in an interview with the Wall Street Journal how after the dot com bubble burst in 2000 and 2001, Ericsson's business went into a tailspin. Carrier customers reversed orders or canceled orders that had already been finished, as operators slashed capital expenditures. In the depths of that turmoil, Ericsson cut around 45,000 employees out of a total of 100,000, slashing $50 million in costs every week for two years straight. However, since then, especially under Vestberg's leadership since 2010, the company has reversed its potion in the market in more ways than one. Ericsson is now the leading wireless network vendor but is much less dependent on hardware. In 2004, 73 percent of the company's revenues came from hardware while 27 percent came from software and services. Yet by 2014, Vestberg said that had almost completely reversed. Article (sub. req.)

While Ericsson has been a leading vendor in deploying LTE networks, Vestberg wants to ensure that the company stays ahead of the pack when it comes to rolling out next-generation networks. "We are sort of the old incumbents that were the winners in the first cycle of all of this," Vestberg said in a separate interview with Re/code. "The only thing I've learned from all of the technology revolution is that it is very seldom that the old incumbent guys are winning in the second cycle. That's why we are in such a hurry….We want to be the winner in the second phase as well." For Ericsson, 5G networks will need to be extraordinarily reliable and versatile as wireless carriers connect medical devices, sensors on crops and all manner of connected gadgets as part of the Internet of Things, some of which will require extremely low latency. "It's very different use cases and this is the same network we are talking about," Vestberg said. "The network would be service-aware….The network has to be so much smarter." Article