Sprint/T-Mobile merger delay hurts Ericsson performance

Sprint/T-Mobile merger delay hurts Ericsson performance

27 January 2020 | Alan Burkitt-Gray

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The long delay in winning approval for the T-Mobile/Sprint merger in the US has hurt Ericsson’s annual results.

CEO Börje Ekholm (pictured) said sales slowed down at the end of 2019, resulting in North America having “the lowest share of total sales for some time”.

Ericsson of Sweden and its Finnish rival Nokia have a dominant share of 5G markets in the US, where the government has banned Huawei and ZTE of China, though Samsung of South Korea also has a market share.

Ekholm said, however: “Due to the uncertainty related to an announced operator merger, we saw a slowdown in our North American business.”

It is nearly two years since T-Mobile US, controlled by Deutsche Telekom, announced plans to merge with Sprint, controlled by SoftBank of Japan. But the two have not received final approval – with the pair waiting for judgement in a recent trial.

Most of Ekholm’s report was positive, however. “Our performance during 2019 puts us on track to reach our targets for 2020 and 2022,” he told shareholders.

“Our focused strategy with increased investments in R&D combined with operational efficiency is paying off. We have regained technology leadership, recovered previously lost ground in several markets and improved the financial results. Today, we are a leader in 5G with 78 commercial 5G agreements with unique operators and 24 live 5G networks on four continents.”

Despite the Sprint/T-Mobile delays, “the underlying business fundamentals in North America remain strong”, he said.