Ericsson takes $1bn impairment charge on Vonage

Ericsson takes $1bn impairment charge on Vonage

Ericsson building sign

Ericsson has recorded a billion-dollar impairment charge for its acquisition of Vonage in 2021, marking the second write-down on the deal.

The impairment charge reflects lower anticipated market growth in some of Vonage’s current portfolio, the firm said.

The first impairment charge was US$2.9 billion and was attributed to the "significant drop in the market capitalisation of Vonage’s publicly traded peers".

The deal was one of Ericsson’s largest ever, with the equipment maker spending around $6.2 billion to buy the company. At the time, Ericsson said it hoped to target enterprise customers as it looked to diversify business operations.

"Given the deterioration in the market environment and elective decisions we have made to refocus our investments in strategically prioritized areas, we have reassessed certain growth assumptions," Niklas Heuveldop, CEO of Vonage said.

Heuveldop, who was appointed earlier this year, added that Vonage aims to advance its strategy to build a Global Network Platform for network application programming interfaces (APIs).

Gift this article