Ericsson ‘dropping enterprise markets move’: report

Alan Burkitt-Gray
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Reuters reports that new CEO Börje Ekholm has reversed Hans Vestberg’s plan to expand into enterprise markets

Ericsson is dropping plans to move into enterprise markets, even though rivals such as Huawei and Nokia are increasingly looking outside telecoms operators, says a report.

The Reuters news agency quoted sources, including Ericsson’s head of digital services Ulf Ewaldsson, in a report saying new CEO Börje Ekholm has dropped his predecessor’s plans to expand the business.

Hans Vestberg, who lost his position last year, said in 2014 that he wanted to boost non-telecoms revenue from 10% in 2013 to a target 25% in 2020. He wanted to look at media, utilities and transport.

Nokia is increasingly focusing on utilities, where it is looking at enterprise LTE networks, and Huawei has a substantial enterprise division.

The Reuters report quotes Ewaldsson as saying in a recent interview: “We will focus on telco clients and networks exclusively for now.”

The agency points out that Ekholm is under intense pressure from shareholders to reverse Ericsson’s revenue and share-price decline. Ekholm was a board member, representing one of the company’s biggest shareholders, during Vestberg’s leadership.

Bengt Nordström, head of Stockholm-based consultancy firm Northstream, told Reuters for the report that 5G – on which many vendors are relying – will help sustain existing revenues but not bring additional revenues.

Ericsson has a venture with Cisco to sell enterprise equipment, though Ekholm’s latest decision may disrupt that relationship.