Ericsson heralds strong 5G momentum after another healthy quarter

Swedish kit vendor Ericsson just keeps delivering solid numbers as its investments in 5G R&D seem to be paying off.

Adjusted for adjustments, sales were up 10% year-on-year, driven largely by Networking sales in North-East Asia excluding China, which means Japan and South Korea. In other words, the 5G rollout in those countries has gained momentum and Ericsson has gained some market share there. Gross margin improved by 2.5 percentage points, resulting in a 39% net income increase.

“The ongoing global pandemic has fast-forwarded the digitalization of societies, placing a significant economic and social premium on high-quality network connectivity,” said CEO Börje Ekholm. “A resilient global digital infrastructure is critical. We see positive signs of governments and enterprises increasingly recognizing 5G as a preferred choice for connectivity with accelerating deployment.

“There is strong momentum in the global 5G demand with lead markets moving forward at high pace, creating opportunities for us to grow our core business. To that end we continue to invest in further strengthening our portfolio and growing our global footprint.

“The Enterprise opportunity, on the back of 5G and IoT, offers another attractive growth area. With the investments we are making in our business in 2021, we are creating a strong platform for the long term with strengthened competitiveness in the core business as well as in Enterprise applications.”

Chatting to head of networks Fredrik Jejdling about the results we learned that there are increasing signs of the market getting more excited about the opportunities 5G offers. At this early stage those are mainly in the fixed wireless access and private network areas, but as standalone 5G rolls out, expect to see low latency plays emerge. Thanks to its own investments and events beyond its control, Ericsson is well positioned to capitalise on any 5G boom.