– Ericsson CEO resigns after sustained market struggles

The diversification away from core telecoms services has been one Vestberg revealed to in July 2015; as he explained how Ericsson was planning on a shift in strategic direction towards ICT, M2M services and multimedia. Bengt Nordstrom, CEO of analyst firm Northstream, says Ericsson missed out on the booming era for mobile broadband rollout, and suggests Vestberg is paying the price for that.

“If you look back to Ericsson’s performance during Vestberg’s time, it has not been very strong from a market perspective,” he said. “And that has been at a time when mobile broadband has been growing faster than ever, so it is time for them to change CEO and perhaps could have been better if the board had acted sooner rather than later.

“What I think Ericsson has missed out for many years is to fully comprehend where the market is going. Operator revenues are levelling out or decreasing and we’ve covered 90% of the global population with mobile, and in my opinion Ericsson has ignored that is the reality of the industry, so in my opinion it should have drastically reduced the cost base for its core business much earlier. The second thing, which I appreciate is difficult, is to explore new revenue streams. Back in the late 2000s it was making a big multimedia play and it made a number of investments, but that’s not been a growth area, it has not been a growing revenue stream and they haven’t found the money there.”

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Bengt Nordström, currently the CEO at consultancy Northstream and who worked at Ericsson AB (Nasdaq: ERIC) from 1983 to 1989, believes the Swedish vendor has failed to capitalize on its unique position in the industry and has also been too reactive rather than proactive to changing market conditions. He says that, just like in 2009 [...]
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