Ericsson Chairman Says Equipment Demand Looks Positive This Year
Ericsson AB (ERICB), the world’s largest maker of wireless networks, said a more optimistic outlook for U.S. demand and China’s move to upgrade mobile services will help support growth in the equipment market this year.
The outlook for overall 2013 demand is “stable and slightly on the positive side,” Chairman Leif Johansson said in an interview today in the southern Chinese province of Hainan, where he’s attending the Boao Forum for Asia.
Ericsson reported fourth-quarter sales that beat analysts’ estimates after wireless carriers boosted spending on network upgrades to provide better Internet connections to their subscribers. The Stockholm-based company’s gross margin, or the proportion of sales remaining after production costs, also widened more than expected.
“I am a little more optimistic on the U.S.,” Johansson said. “Perhaps Europe too has stabilized. I don’t think we have any more bad news coming from Europe.”
Johansson also said he sees growth in China continuing. China Mobile Ltd. (941), the world’s largest carriers by users, said last month that it plans to increase capital expenditures by 49 percent this year to 190.2 billion yuan ($30.7 billion). In 2012, China and northeast Asia accounted for about 17 percent of Ericsson’s sales.
Ericsson in February said it signed a five-year contract to manage VimpelCom Ltd. (VIP)’s wireless network in Siberia and the Ural regions. In that same month, the company announced it won a $1 billion contract to manage the systems of Indian carrier Reliance Communications Ltd. (RCOM)
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