Ericsson begins to wind down its modem business

18 September 2014 | Kavit Majithia


Sweden’s Ericsson is to cut or reallocate approximately 1000 jobs after confirming that it will wind down its modem business.

The unit has made significant losses due to the falling prices of modems and increasing demands on Research and Development, in addition to a shrinking market.

The vendor will now evaluate the future of the business and make a decision within the next 18 to 24 months.

It took on the unit in 2013 after its joint partner STMicroelectronics pulled out, and the company’s chief executive Hans Vestberg has said the business could now be too expensive to continue its operations.

“We believe we can use this money in a better way,” he told Reuters.

Ericsson is now expected to use the resources to develop radio networks, and will now abandon any hopes of competing in the modem business alongside market leaders Qualcomm and Intel.