Bloomberg – Ericsson CEO’s Do-List: Reality Check, Then Hard Decisions
On the horizon for Ericsson and Ekholm is the fifth-generation mobile-network technology that is currently under development, and to keep from slipping further, Ericsson will need to prove its capabilities in developing products for the new standard.
However, large-scale commercial deployment of 5G networks isn’t expected until 2020 and even then, it may not provide the boost to network-equipment makers’ revenue that previous upgrade rounds have, according to Bengt Nordstrom, CEO of telecom industry consultancy firm Northstream.
“Their plans cannot be based on the assumption that revenues for some mysterious reason will increase and that operators will start making huge investments,” Nordstrom said.
For the fourth quarter, Ericsson is projected to report an almost 20 percent sales decline from the year-earlier period. Ekholm will need to think hard about what to say to keep his staff motivated despite the bleak prospects and need for further downsizing, Nordstrom said.
“It’s a company in a very pressed situation, and a lot of people have had to leave,” Nordstrom said. “One important aspect is to show management and employees that a turnaround is possible.”
