ERIC Ericsson

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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