Ericsson has reported better than expected results for the first quarter of 2020, with disruption caused by the coronavirus blamed.
The Swedish telecoms equipment giant told investors that Covid-19 had had “limited impact” on its income during the period. Operating income rose by nearly a third to 4.6 billion SEK with sales up 2 per cent to 49.8 billion SEK.
The pandemic has elevated the importance of telecommunications and although Ericsson expects the industry to remain resilient, it does foresee some problems in the medium future. At present it is maintaining its outlook for 2020 and 2021 but fears coronavirus could delay the rollout of 5G in Europe.
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Ericsson results
“There is near-term uncertainty around sales volumes due to Covid-19 and the macroeconomic situation, but with current visibility we have no reason to change our financial targets for 2020 and 2022,” said Ericsson CEO Borje Ekholm.
Ericsson kit is currently used in 29 commercial 5G networks while it has seen increased demand for its core networking technology. It has also been boosted by a major contract win in China and by the US government approval for the merger between T-Mobile and US. Ericsson has devoted significant resources to North America, a market from which chief rival Huawei is excluded.
However there are concerns that government lockdowns and travel restrictions could impact supply and service delivery. It is also resigned to the fact that a general economic slowdown could result in a pause in investments by operators.
“While we have been successful improving our position in Europe, we are concerned that 5G investments in Europe are delayed,” continued Ekholm. “This means that Europe may fall behind on a critical digital infrastructure for the future. The criticality of the digital infrastructure has been further evidenced during the pandemic. We believe governments should encourage 5G investments as a way to restart economies.
“The massive disruption caused by Covid-19 has demonstrated the criticality of the network in today’s society and we are currently working closely with our customers to keep their networks running. During this period, our supply and service delivery has worked with limited interruption.”
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