Ericsson to expand in Europe, China

Big money to be made in 4G upgrades in Europe and China

Ericsson is hoping to expand its business in Europe and China, where it said there is an increase in demand for 4G mobile networks.

Hans Vestberg, CEO of Ericsson, said that some larger projects in the US have been a bit slow, but it has gained market share in Europe, which it can now upsell on. He said there are also other markets of interest, including China and Russia, according to The Economic Times.

With 4G LTE adoption increasing throughout the world, Ericsson is hoping to increase its share of the action. Upgrading current networks to 4G provides a lucrative opportunity for any company that can secure the contract, and there is still a lot of work to be done in this sector in the big European and Chinese markets.

Regaining ground

Ericsson reported revenue of $1.4 billion (£850 million, AU$1.6 billion) in the final quarter of last year, just shy of average analyst forecasts. It also inked a cross-licensing agreement with Samsung for various mobile standards, including GSM and LTE.

The company secured LTE contracts with two major operators in China in the fourth quarter. The period also saw some growth in key European markets and Ericsson said the negative impact of these modernisation projects is now behind it.

At one time Ericsson had operating profit margins higher than 20 per cent, but last year this figure was just 6.2 per cent. It has a lot of ground to recover, and markets outside the US just might help with that.

Ericsson shares were up $0.60 (£0.36, AU$0.69), or 5.02 per cent, to $12.55 (£7.62, AU$14.40) at the time of writing.