In Short:
Telecom gear maker Ericsson reported a 44% decline in sales in Southeast Asia, Oceania, and India due to lower spending by Reliance Jio and Bharti Airtel. The sales dropped to 7.7 billion crowns in Q2 2024. Both Jio and Airtel have completed their 5G deployments, while Vodafone Idea is in talks with Ericsson for equipment. Ericsson’s net sales fell by 7%, but it returned to growth in North America. CEO Börje Ekholm expects market conditions to remain challenging this year.
Ericsson reports 44% decline in sales in Southeast Asia, Oceania, and India
Ericsson, the Stockholm-headquartered telecom gear maker, has reported a 44% year-over-year decline in sales in Q2 2024 in the market area Southeast Asia, Oceania, and India. This decline is primarily attributed to lower capital expenditure (capex) by Reliance Jio and Bharti Airtel.
Sales figures and impact
Ericsson’s sales in the mentioned region dropped to 7.7 billion crowns in Q2 2024 compared to 13.8 billion crowns in the same quarter last year. The vendor’s net sales in the region were down by 10% sequentially.
According to Ericsson’s earnings report, “Sales decreased by -44% YoY. Networks sales declined primarily in India as investment levels have normalised after a record year in 2023.”
Effect on 5G equipment market
The slowdown in spending on 5G equipment by Indian telcos Jio and Airtel has impacted Ericsson and its competitor Nokia. Both companies have resorted to cost-saving measures including job cuts. Jio and Airtel have completed their pan-India 5G deployments while Vodafone Idea is still in discussions with vendors for buying 5G gear.
Financial agreements and outlook
In June, Ericsson India finalized an agreement with Vi to settle dues and take an equity stake in the telco. The impact of this transaction is expected to reflect in Ericsson’s Q3 results.
Overall, Ericsson’s net sales group-wide fell by 7% to 59.8 billion crowns in Q2, with the mobile networks business seeing an 11% decrease due to lower customer investment levels, primarily in India.
CEO statement
Despite the challenging market environment, Börje Ekholm, President and CEO of Ericsson, expressed confidence in the company’s competitiveness. He mentioned a focus on optimizing the business and proactive steps for longer-term success. Ekholm expects market conditions to remain challenging this year but anticipates sales to improve in the second half due to contract deliveries in North America.
