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How Ericsson Aims to Beat Competition in the Networks Market

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Dec. 5 2017, Updated 7:30 a.m. ET

Customer focus

Ericsson’s (ERIC) Networks segment is the firm’s largest and is expected to drive its revenues and profitability. Ericsson aims to provide customers with its highly scalable modular platforms and plans to increase R&D (research and development) investments to accelerate key radio platforms, products, and serviceability.

This focus on R&D is also expected to drive product innovation and service delivery efficiency.

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Reducing supply costs

By the end of 2020, Ericsson has estimated a 30% decrease in supply costs. It has managed to reduce these costs by 10% in the first three months of 2017.

Ericsson would also like to reduce its service delivery costs by 30%. The firm managed a 7% cost reduction in this vertical during the first nine months of 2017.

Focus on worldwide markets

In North America and Western Europe, Ericsson would like to lead 5G markets, driven by successful industrial experimentation and trials. As South America, Africa, and the Middle East continue to recover from macroeconomic challenges, Ericsson aims to focus on LTE (long-term evolution) rollouts and increase momentum in these markets.

Meanwhile, Ericsson expects China (FXI) and Northeast Asia to drive 5G demand in the future, while Southeast Asia and India (INDA) are expected to drive LTE momentum due to strong mobile and data traffic upticks.

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