Telecom TV – Ericsson continues its decline: Vestberg takes the rap and goes
According to Bengt Nordstrom, CEO of Sweden-based independent telecoms consultancy Northstream, the Vestberg fall was inevitable. “Hans had been CEO since 2009 and there hasn’t been any value creation, just continuous cost cutting. There wasn’t any growth in the time of the previous CEO either,” he added.
So what went wrong, what should Vestberg have done that he didn’t?
“It’s easy with hindsight to come up with this that or the other,” says Bengt. “But i think the truth is that whatever was decided he would have had to have laid a bigger bet. If you really want to be big in IoT [an area Ericsson identified from the earliest days] you would have to have gone in big, recognising that it’s a service-based industry, with components and data analytics also very important. They should have done acquisitions at a much larger scale to be someone there.”
The fact is, he says, that the pure telecoms sector is simply declining “A lot of the IT investment is happening outside the telecoms space. Ericsson should have dealt with its cost structure much earlier. Now it is waking up and reacting.”