Telecom equipment maker Ericsson on Tuesday reported a 40% quarter-on-quarter (QoQ) fall in revenue from India operations to 5.75 billion Swedish crowns (around Rs 4,560 crore) in the October-December quarter, according to the company’s earnings.
Ericsson, which till the July-September quarter was witnessing record sales from India operations, said its sales from the region during the reported quarter declined sequentially as the market has started seeing normalised investment levels from telecom operators following an unprecedented 5G network rollout pace.
On a year-on-year basis, the company’s sales from India rose 14% in October-December, owing to higher sales of telecom equipment as Airtel and Jio deployed 5G. During the same period in 2022, 5G was only introduced in India and pace of network rollout was slow.
“The mobile network industry remains challenging,” said Börje Ekholm, president and CEO, Ericsson, in the earnings statement. “We expect the current market uncertainties to prevail into 2024 with a further decline of the RAN (radio access network) market outside China as our customers remain cautious and the investment pace is normalizing in India,” Ekholm added.
According to the company, a reduction in capital expenditure, largely from telecom operators in India, was expected in the beginning of 2024 but that occurred earlier than anticipated.
Even as India continues to remain the second biggest market for Ericsson, the country’s share in Ericsson’s total sales during the quarter fell to 8% from 15% in the preceding quarter. Compared to the same period last year, India’s share rose by 2%.
From January to December 2023, India’s contribution to Ericsson’s global sales rose to 12% from 4% in 2022. The US continues to be the largest market for Ericsson with a 32% market share in 2023, compared to 40% in 2022.
For the full year 2023, Ericsson India’s revenue rose nearly three times to 31.6 billion Swedish crowns (around Rs 25,160 crore).
In India, the company is supplying network equipment such as 5G Radio Access Network (RAN) to telecom operators Reliance Jio and Bharti Airtel. Ericsson is currently bullish on the opportunity of fixed wireless access (FWA) in India.
In the October-December quarter, Ericsson’s total sales globally fell 16% y-o-y to 71.8 billion Swedish crowns (around Rs 57,000 crore). In the combined Southeast Asia, Oceania and India, Ericsson’s revenue grew 5% y-o-y to 11.8 billion Swedish crowns (Rs 9,540 crore). In other markets such as North America, Europe and Latin America, the company’s sales fell by 43% and 8% YoY, respectively.
In markets such as North East Asia and Middle East and Africa, the company’s revenue grew 9% and 5%, respectively.
Ericsson’s net profit globally in the October-December quarter fell 45% YoY to 3.4 billion Swedish crowns (Rs 2,700 crore). For 2023, the company incurred a loss of 26 billion Swedish crowns (Rs 20,683 crore) globally, compared to a profit of 19 billion Swedish crowns (Rs 15,160 crore) in 2022.
Ericsson expects the the near-term outlook be uncertain. However, it is expected that Ericsson’s market share in North America will increase towards the later part of 2024, based on a recent contract win, the company said.