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Ericsson CEO: The Company Is Strong

By Vivek Naik, TMCnet Contributor

Ericsson Chief Executive Officer and President Carl-Henric Svanberg (News - Alert) reportedly detailed several positive points during the company’s annual shareholder meeting, likely hoping to allay some of the fears about the down economy.

 

“We are in the process of building the new IP networks and bringing together today’s fixed and mobile networks,” Svanberg said. “We’re debt-free and by the end of the year we had net cash of SEK 35 billion ($4.19 billion). We have basically no customer financing and extensive cost reduction activities in place. We are market leaders and at the forefront of technological development. The world is experiencing turbulent times, but Ericsson (News - Alert) is strong.”

 

Svanberg added that Ericsson has grown at the rate of 12 percent annually every year since 2003 and claims that this growth was faster than the market’s rate. Market projections, said Svanberg, have been proved conclusively wrong. In 2003, it was predicted that Ericsson’s nearly $14 billion turnover would grow only $1.5 billion by 2008. Its turnover actually logged in at almost $25 billion and proved predicting pundits wrong by a whopping 733 percent, and it records daily sales of nearly $120 million.

 

“Telecommunications is fundamental to sustainable development,” said Svanberg. “At the same time, there are huge business possibilities here because the challenge that the world faces will demand major investments in technology and telecommunication.”

 

Prior to detailing Ericsson’s involvement in building mobile networks, he cited examples that exposed significant revenue stream potential. Of the 4 billion people that possessed mobile phones, only 400 million had access to mobile broadband.

 

The expansion of telecommunications, wired broadband and Wi-B (News - Alert) was right on top of most governments’ priority lists, reported TMCnet. He said that the U.S. government wanted broadband to reach every citizen, and $7.2 billion, reported TMCnet, had been allotted via the American Reinvestment and Recovery Act of 2009 with an additional $1.3 billion set aside in federal budget for the fiscal year 2010. Svanberg added that China had undertaken the largest telecommunication expansion projects the world has ever seen.

 

“Mobile broadband is creating opportunities for people to gain access to development and a better life, even in the poorest countries,” Svanberg said. “We’re now building mobile networks in the UN’s Millennium Villages, where the poorest of the poor live. We can already see the huge importance the networks are having on development and that this is good business for operators even in these parts of Africa.”

 

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Vivek Naik is a contributing editor for TMCnet. To read more of Vivek's articles, please visit his columnist page.

Edited by Michael Dinan