Ericsson Projects Network Growth of 3% or More on Data Usage

Ericsson AB (ERICB), the world’s largest maker of wireless networks, forecast the market for such equipment will keep expanding 3 percent or more annually for the next few years as phone carriers cope with rising data use.

Ericsson said today the network-gear market will grow an average of 3 percent to 5 percent through 2016, extending its earlier forecast for that pace through 2015. The market for related services will grow 5 percent to 7 percent a year, Stockholm-based Ericsson said.

Ericsson is competing against Nokia Oyj (NOK1V) and China’s Huawei Technologies Co. as carriers expand and upgrade their networks amid rising demand for mobile video, music and data services. While revenue in the third quarter declined in North America and Japan as large coverage projects peaked, the European market is starting to shrug off effects of the financial crisis and carriers such as Vodafone Group Plc ramp up spending.

“What you’re seeing is some growth in the market, but I don’t think the numbers will impress anybody,” said Lars Soederfjell, an analyst at Aalandsbanken in Stockholm. “It’ll be up to Ericsson to capitalize on this and improve profitability.”

Shares of Ericsson rose 1.4 percent to 78.75 kronor at 10:01 a.m. in Stockholm, valuing the company at 259 billion kronor ($40 billion). They had gained 19 percent this year through yesterday.

To contact the reporter on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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