Ericsson sees ‘footprint losses’ in Latin America amid competition, lower telco investments

Competition and lower-than-expected investments by mobile carriers in networks continue to take a toll on Swedish telecoms supplier Ericsson in Latin America.

The group’s Q3 year-on-year organic sales in the region plus Europe “grew by 1%, as growth in Europe was partially offset by a decline in Latin America, where we had some footprint losses,” CEO Börje Ekholm told investors in an earnings call.

Ericsson reports Europe and Latin America as a single business unit. 

On a reported basis, Q3 sales in Europe and Latin America fell 2% year-on-year to Swedish kronor 15.2bn (US$1.46bn).

Ericsson’s global sales fell 4% (reported) and 1% (organic) in Q3 to 61.8bn kronor. Net income was 3.9bn kronor compared to a loss of 30.5bn a year earlier. 

“Sales in Europe increased slightly, benefiting from strong deliveries in the quarter, despite a continued challenging market environment. In Latin America, sales decreased due to increased competition and lower customer network investments,” the company said in its results report.

Ericsson continues to see the global mobile network market as challenging but highlighted signs of stabilization in the segment and some improvements in Q3. 

Among these were contract wins in India and Vietnam. 

The company saw a 55% sales increase in North America driven by a recent AT&T contract that is now reaching the delivery phase, according to the firm.

APIs

Looking ahead, Ericsson is upbeat about "increased customer momentum" around programmable networks, supported by a JV announced with 12 of the world’s largest telecom operators including Latin America big hitters América Móvil and Telefónica.

Announced in September, the JV will aggregate network application programming interfaces (APIs) and is expected to facilitate the launch of 5G services and applications, enable new use cases for enterprises and to open up revenue streams for the telecom industry.

Network APIs are open interfaces that enable developers to access specific network resources and integrate them into use cases.

The partnership was closed with América Móvil, AT&T, Bharti Airtel, Deutsche Telekom, Orange, Reliance Jio, Singtel, Telefónica, Telstra, T-Mobile, Verizon and Vodafone. 

All these telcos, supported by Ericsson, are opening their networks to developers through a global platform of APIs.

PRIVATE NETWORKS

Another of the Swedish company's bets is on private networks.

At an event celebrating its 100 years of operations in Brazil early this month, the company announced it will take its Ericsson Enterprise Wireless Solutions (EEWS), a unit dedicated to the industrial connectivity segment, to the country starting in 2025.

The subsidiary already operates in countries such as the US, Mexico and parts of Europe. It was formerly called Craddlepoint, a company bought by Ericsson in 2020 for US$1.1bn.

This year, Ericsson also celebrated 120 years of operations in Mexico.