Ericsson CEO: See 2017 Mobile Telecom-Equipment Market Shrinking 2%-7%
November 16 2016 - 1:29PM
Dow Jones News
By Nick Kostov
BARCELONA--Ericsson AB (ERIC) said Wednesday it expects the
market for mobile telecommunications equipment to decline between
2% and 7% next year as the giant Swedish company continues to
grapple with waning demand and stiff global competition.
"We're cautious about 2017 as a year," Chief Executive Jan
Frykhammar said during the Morgan Stanley TMT conference in
Barcelona. "In that context we think that the U.S. will be like it
has been this year: flattish from a capex environment point of
view."
Mr. Frykhammar--who will hand over the reins to incoming CEO
Borje Ekholmin in January--said the company expects the market for
mobile telecom equipment to shrink between 10% and 15% this
year.
Ericsson said last month it would cut 3,000 jobs in Sweden as
part of a global restructuring program aimed at saving 10 billion
Swedish kronor ($1.09 billion) in annual operating expenses by the
second half of 2017, compared with 2014. The company has been
battling slowing demand for its cellphone towers and switches, and
faces strong competition from China's Huawei Technologies Co. and
Nordic rival Nokia Corp. (NOK).
On Tuesday, Nokia said it expects its networks business to
decline in line with the market globally, which it said would
shrink by 2% in 2017.
"Overall we think it's wise to be thinking of 2017 as a very
challenging year," Mr. Frykhammar said. "We'll continue with our
dividend policy, the same one that we've had for three or four
years. Our ambition is to stay with a strong capital
structure."
--Matthias Verbergt contributed to this article.
Write to Nick Kostov at nick.kostov@wsj.com
(END) Dow Jones Newswires
November 16, 2016 13:14 ET (18:14 GMT)
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