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Strong 5G sales in India boosted Ericsson’s Q1 earnings

India is now Ericsson’s second-largest market by net sales, accounting for 11% of net sales, with the Philippines taking the third spot.

The sales impact of the first 5G markets was not entirely offset by Ericsson’s big roll-out projects in markets like India. Reliance Jio and Bharti Airtel, two Indian telecom companies, began rolling out their 5G networks in India in October 2022. Since then, the two have put over 140,000 5G base transceiver stations (BTS) in more than 900 cities and towns around the nation.

HIGHLIGHTS

  • Strong 5G equipment sales in countries like India, according to Ericsson, have increased its profitability for the quarter ending in March 2023.
  • With 11% of net sales, India is now Ericsson’s second-largest market after the US, which accounted for 37% of net sales in the first quarter of FY24.
  • The top five markets for Ericsson underwent some change, with the Philippines moving up to take the third slot with a share of 5% (instead of 1% in January-March 2022) and India moving up to a strong number two position with an 11% share of net sales.

The Swedish maker of telecom equipment, Ericsson, has revealed that despite declining sales and eroding margins in more established regions, robust 5G equipment sales in countries like India have increased its earnings for the quarter ending in January–March 2023. With 11% of net sales, India is now Ericsson’s second-largest market after the US, which accounted for 37% of net sales in the first quarter of FY24.

The Swedish maker of telecom equipment, Ericsson, has revealed that despite declining sales and eroding margins in more established regions, robust 5G equipment sales in countries like India have increased its earnings for the quarter ending in January–March 2023. With 11% of net sales, India is now Ericsson’s second-largest market after the US, which accounted for 37% of net sales in the first quarter of FY24.

Carl Mellander, the chief financial officer of Ericsson, asserted that “India is strong and a good example where our sales are up five times.” India’s net sales share increased from 6% in the October-December 2022 quarter to 11% in the January-March 2023 quarter.

Ericsson reported net sales of 62.6 billion SEK (Swedish Krona) or $6.08 billion for the three-month period, an increase of 14% from 55.1 billion SEK ($5.35 million) from the same period last year. However, earnings before interest and taxation fell to 3 billion SEK ($290 million) from 4.7 billion SEK ($460 million) a year earlier.

According to Börje Ekholm, President and CEO of Ericsson, “as predicted, clients in early 5G areas have slightly delayed the rollout pace. Our impact on sales is greater since some clients have also reduced the excessive inventory levels amassed in a situation of limited supply.

The sales impact of the first 5G markets was not entirely offset by Ericsson’s big roll-out initiatives in areas like India. Reliance Jio and Bharti Airtel, two Indian telecom companies, began rolling out their 5G networks in India in October 2022. Since then, the two have put over 140,000 5G base transceiver stations (BTS) in more than 900 cities and towns around the nation.

India rose to a solid second place in Ericsson’s top five markets, accounting for 11% of net sales, while the Philippines moved up to third place, accounting for 5% of net sales (as opposed to 1% in January-March 2022). Last year’s third- and fourth-place finishers, the UK and Japan, now hold the fifth and fourth positions, respectively. China (6% in January-March 2022) and France (3% in January-March 2022) have fallen out of Ericsson’s top five markets by net sales due to India and the Philippines’ arrival.

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Written by Shallu Srivastav

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