Ericsson Names New CEO to Steer Turnaround
October 26 2016 - 4:50AM
Dow Jones News
STOCKHOLM—Ericsson AB appointed Bö rje Ekholm as its new chief
executive Wednesday, as the struggling Swedish telecom-equipment
provider looks to turn around its business amid waning demand and
stiff global competition.
Mr. Ekholm joins Ericsson from his current position as CEO of
Patricia Industries, a division within Investor AB, a Swedish
investment company that is Ericsson's largest shareholder,
controlling over 20% of its voting rights.
Ericsson had been looking for a new CEO since it ousted Hans
Vestberg in July, as the company is battling slowing demand for its
cellphone towers and switches and faces fresh competitive threats
from China's Huawei Technologies Co. and Nordic rival Nokia
Corp.
Last week, Ericsson plunged to a third-quarter loss, hit by
slowdown in spending by mobile-service providers on
latest-generation, or 4G, networks, as many mobile-broadband
projects were completed last year.
At the same time, Ericsson faces fierce competition from
Finland's Nokia, which acquired rival telecom-equipment supplier
Alcatel-Lucent SA, and Huawei, which is expanding aggressively
world-wide.
Ericsson is betting big on the development of the next
generation of wireless networks, or 5G, but the large-scale rollout
of 5G networks won't happen before 2020, analysts say.
Meanwhile, Ericsson is cutting costs significantly. Earlier this
month, it said it would cut 3,000 jobs in Sweden, as part of a
global restructuring program aimed at saving 10 billion kronor
($1.12 billion) in annual operating expenses by the second half of
2017, compared with 2014.
Mr. Ekholm "has a solid understanding of both the technology and
business implications of the ongoing convergence of telecoms, IT
and media," said Leif Johansson, chairman of Ericsson's board of
directors.
"As the networks and applications become even more important in
a 5G connected world, our customers, and the industry, look for
continuous innovation," Mr. Ekholm said in a statement.
Mr. Ekholm, 53 years old and a member of Ericsson's board over
the past 10 years, will replace acting CEO Jan Frykhammar on Jan.
16, 2017.
Ericsson said Mr. Ekholm will remain a member of the board.
Write to Matthias Verbergt at Matthias.Verbergt@wsj.com
(END) Dow Jones Newswires
October 26, 2016 04:35 ET (08:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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