Ericsson will build Verizon’s 5G network
Ericsson has signed a 5G agreement with the American telecom operator Verizon worth 8.3 billion dollars, equivalent to 72 billion kronor. The announcement comes in connection with the company’s interim report.
The rollout of 5G is now underway around the world and Ericsson has now secured a heavy contract. American Verizon, with Swedish CEO Hans Vestberg, is one of the absolute heaviest players in the American market.
In the press release, the companies write that Ericsson will now contribute to expanding Verizon’s 5G network throughout the United States.
Reduced sales in China
At the same time, Ericsson reports an operating profit (ebit) excluding restructuring costs for the second quarter of SEK 5.8 billion, up from SEK 4.5 billion in the same period last quarter. The result was slightly lower than analysts’ expectations, which according to Refinitv’s compilation were SEK 6.0 billion.
Ericsson’s sales during the quarter amounted to SEK 54.9 billion, compared with SEK 55.6 billion a year earlier. The average forecast for sales was SEK 57.1 billion, according to Refinitiv. In the CEO’s speech, however, Börje Ekholm once again warns of an impact on the Chinese market as a consequence of Huawei being shut out of the Swedish market. In the Networks business area, sales in China will also decrease by two billion.
Strong demand in Asia
In the rest of Asia, however, the company sees strong demand precisely when it comes to 5G.
“We have accelerated our production to meet future challenges,” Ekholm writes in the report.
A question mark, however, is the increased spread of covid-19 in the region, which according to Ekholm may affect the recovery in affected countries.
