NEW DELHI: Swedish telecom gear maker Ericsson mentioned that the corporate will proceed to spend money on R&D in 2021 and is witnessing good development alternatives in 5G, particularly within the rising enterprise sector.
“Our technique stays in place, however we see nice development alternatives within the enterprise section, which is why we’ve expanded our technique with investments in enterprise purposes. In the identical means that 4G made it potential to digitalize the buyer market, 5G will digitalize the enterprise sector,” mentioned Börje Ekholm, President, and CEO, Ericsson on the Shareholder Dialogue 2021 occasion.
In 2020, Ericsson forayed into the enterprise market by buying Cradlepoint Cradlepoint’s options allow corporations to attach websites, autos, distant workforces, and IoT gadgets utilizing mobile networks.
For the complete yr 2020, Ericsson logged an natural development of 5.1%, a gross margin of 40.3%, an working margin of 12%, and FCF earlier than M&A amounting to SEK 22.3 billion, marking 2020 the strongest free money circulate within the firm’s historical past.
Ekholm famous that the corporate’s focus can be on driving development, investments in market share to make sure scale, however it is going to even be eyeing rising alternatives within the enterprise section.
He additional mentioned that Ericsson can be investing in 2021 to strengthen its place available in the market however expects margins to be hit by decrease patent licensing revenues as a consequence of necessary contract renewals, the acquisition of Cradlepoint, and investments within the enterprise.
Over the previous years, Ericsson has elevated its R&D investments by virtually SEK 10 billion, and immediately greater than 1 / 4 of Ericsson’s workers work inside the R&D.
“Nonetheless, these are usually not prices, however quite investments to strengthen our place. We’re taking half a step again so as to have the ability to speed up,” he mentioned.
Ekholm highlighted that the yr 2021 will proceed to see robust 5G rollouts, carrying the momentum created over the past yr.
Based mostly on assessments made by Ericsson, there have been round 220 million 5G subscribers on the finish of 2020 in comparison with 12 million in 2019.The chief government mentioned Ericsson introduced 44 5G contracts and closed the yr with 122 industrial agreements and 79 reside 5G networks globally, whereas it had greater than 57,000 granted patents for mobile expertise.
Nonetheless, he raised issues that Europe lags far behind each the U.S. and China on the subject of the 5G rollout.
Regardless of the challenges posed by the COVID-19 pandemic in 2020, Ekholm mentioned the corporate recruited 10,000 new workers. “Regardless of these challenges, we managed to execute on our technique and ship to our prospects!” he mentioned.
He additional mentioned sustainability continues to be an integral a part of Ericsson’s technique and the corporate goals to turn into carbon impartial in 2030.