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ERICSSON

Ericsson shares surge after major 3 deal

The Swedish telecommunications giant Ericsson said on Tuesday that it had signed a major contract to run the entire network of British mobile phone operator 3, a subsidiary of Hong Kong's Hutchison Whampoa.

Ericsson said the deal was its largest managed-services contract ever and one of the largest such deals in the telecommunications industry.

The company gave no figures for the value of the contract, but its largest single contract previously was a five-year managed-services deal with 3 in Italy for 15 billion kronor (1.9 billion dollars).

“We are talking about something around 20 billion kronor,” estimated Helena Nordman-Knutson, telecommunications analyst at Öhman Equities.

“Three billion per year, maybe more,” she told the TT news agency.

The agreement announced on Tuesday, which gives Ericsson responsibility for the management of the 3 network and its IT infrastructure, runs over seven years, it said.

Ericsson said it would also be in charge of 3’s ongoing radio network rollout, the maintenance of 6,300 existing radio sites and the management of the operator’s core network and operations centre.

3 was to retain ownership of the network and its IT assets as well as responsibility of the strategic direction of the network.

Some 1,000 staff would be moved from 3 to Ericsson as part of the accord.

Ericsson shares rose 3.73 percent to 27.80 kronor on the Stockholm stock exchange following the announcement, having been suspended just ahead of the statement.

3, the first company to have launched third-generation mobile services in Britain, has 3.2 million customers in Britain and 10 million worldwide, Ericsson said.

Ericsson, which claims to have the industry’s most comprehensive managed services offerings, currently has such agreements with 55 operators worldwide, representing 50 million customers.

AFP

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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