Sweden's telecommunications equipment giant Ericsson's Chinese business is in serious slump. According to the company's financial report for the July-September period of 2021 released on October 19, sales in mainland China in the same quarter were SEK 1.3 billion (about 17.2 billion yen), 5 billion in the same period of the previous year. It fell by 74% from the Swedish krona (about 66.3 billion yen).
Along with this, mainland China's contribution to overall Ericsson sales has also declined. Mainland China's share of cumulative sales from January to September 2021 halved from 8% in the same period last year to 4%. As a result, in the sales ranking by country during the same period, China retreated to 3rd place after the United States (35%), which is the top, and Japan (6%), which is the 2nd place.
The main reason for Ericsson's slowdown in China's business is believed to be geopolitical impact (due to worsening diplomatic relations between China and Sweden). This is because in October 2020, the Swedish government decided to exclude Chinese telecommunications equipment giants Huawei and ZTE from its 5G (5th generation mobile communications) network.
In response, Ericsson repeatedly expressed concern at financial results briefings and other occasions, saying that "geopolitical risks could have a substantial and long-term negative impact on business performance."
Started restructuring of Chinese sales and technical team
In fact, Ericsson's share dropped significantly in the 2021 bid for telecommunications equipment by Chinese carriers. For example, in the bid results for the 700MHz band 5G wireless network announced by China Mobile, the largest telecommunications company, in July, Ericsson's winning bid ratio was only 2%.
Against this harsh reality, Ericsson CEO Borrie Ekholm mentioned the restructuring of a local subsidiary at a financial results briefing for the July-September quarter. "We have to scale our sales and technical support team to the right size, which we'll do in the October-December quarter," she said.
This article is provided by "Financial New"Ericsson's Chinese subsidiary has already begun reorganization from the end of September, according to a news reporter. It seems that it will reduce hundreds of employees by consolidating the three sales departments that were individually dealing with the three major carriers in China. Ericsson's Chinese subsidiary currently employs about 10,000 people.
(New reporter: Shizuka) * The original text will be delivered on October 20th.
Receive the latest published article by Zaishin Biz & Tech by email (following the author)
Popular business articles Topic board AD related articles Serialization list Trend library AD Popular videos Rakuten Securities, too heavy compensation for "1% point reduction" Panasonic "In-vehicle battery surviving" wall restaurant chain "Growth model that relies on expanding store openings" The true meaning of Lotte's acquisition of Kyoto's "Choco Venture"* For articles within the past week
»Click here for 11th to 30th place* For articles within the past month
»Click here for 11th to 30th place* For articles within the past month
»Click here for 11th to 30th place* For articles within the past month
»Click here for 11th to 30th place* Total weekly likes and shares (increase)
»Click here for 11th to 30th place Trend Watch AD Weekly Toyo Keizai latest issue Factory disappears Last choice for decarbonization approachingA rush to close domestic factories that will accelerate again in the wake of decarbonization. The development model of postwar Japan, which is an "export-oriented country," is fundamentally shaking. The industry order is changing drastically as symbolized by the battle between Toyota and Nippon Steel. Will the manufacturing industry survive the EV shift and digitalization?
Go to STORE Subscription Tweets by Toyokeizai Toyo Keizai Books * Introducing popular books from books published within 3 months. »See more Privacy policy Intellectual property service introduction Advertising database service for corporations Inquiry Employment information Toyo Keizai Shinposha Top of page Top page