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Ericsson
Company Profile

by Faulkner Staff

Copyright 2022, Faulkner Information Services. All Rights Reserved.

Docid: 00016299

Publication Date: 2205

Report Type: VENDOR

Preview

Headquartered in Sweden, Ericsson is a leading provider of networks, wireless
technology, and telecom services to mobile and fixed network operators. The company
owns more than 60,000 patents and is expanding into the fields of cloud computing and
Internet of Things solutions. After great success in the adoption of 4G standards worldwide, Ericsson
has worked to meet global demand for wireless services by collaborating with
leading developers and service providers to create a widely-adopted 5G wireless
standard. 

Report Contents:

• Fast Facts
• Profile
• Strategy
• Product Lines
• Activity

Fast Facts

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Name: Telefonaktiebolaget LM Ericsson
Headquarters
Torshamnsgatan 21, Kista
SE-164 83 Stockholm, Sweden
Phone: 46 10 719 00 00
Web: https://www.ericsson.com/
Type: Telecommunications Equipment Supplier
Service Areas: 180+ Countries
Founded: 1876
Number of Employees: 101,067 (2022)

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Profile

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Ericsson is the world’s leading provider of technology and services to
telecommunications (telecom) operators. Ericsson employs
more than 100,000 people worldwide, serving customers in more than 180
countries. As an indicator of Ericsson commitment to R&D, the company owns
in excess of 60,000 patents and receives licensing royalties from top smartphone makers. 

History & Milestone Events

Ericsson’s history dates back to 1876, when Lars Magnus Ericsson opened a
repair shop for telegraph equipment in Sweden. He soon realized that there was a
need for improvements in telephones and began manufacturing them himself.

• 1892 – In 1892, Ericsson launched its first major international product,
  a table-top device with a separate handheld microphone. Since then, Ericsson became of the world’s leading manufacturers of advanced
  telephone equipment, with a very large percentage of sales outside Sweden.
• 1995 – By 1995, 18,000 Ericsson employees were engaged in technical development work, or 21
  percent of all employees. Of the total development work, workers in
  Sweden were responsible for 60 percent. As of 1995, Ericsson was investing as much as $1.6 billion USD annually in technological development.
• 2001 – Shifted its focus to areas other than mobile phone making.
  Increased investment and development of 3G and mobile IP networks.
  Reorganized into five service units and three
  regional units.
• 2001 – Formed
  a mobile phone joint venture with Sony named Sony Ericsson Mobile
  Communications, which began operations on October 1st.
• 2001 – Hit by the burst of the dot-com bubble, Ericsson sold its direct enterprise and sales unit, cut
  20,000 jobs, and outsourced IT operations to EDS.
• 2002 – Announced an additional 20,000 layoffs and sold its
  semiconductor unit to Infineon for $380 million USD.
• 2003 – Sold optoelectronics business to Northlight
  Optronics. Carl-Henric Svanberg took over as president and CEO of
  Ericsson.
• 2004 – Became a principal member of the
  WiMAX Forum. 
• 2005 – Launched trials and upgrades of
  HSDPA. Agreed to buy Marconi’s
  wireline networks business. Joined other telecom equipment vendors in filing separate
  complaints against QUALCOMM for anti-competitive conduct in licensing its 3G
  patents.
• 2006 – Bought Marconi’s wireline networks and federal businesses.
  Joined the SCOPE alliance for promoting
  carrier-grade application platforms. Reorganized into three units: Networks, Global Services, and Multimedia.
  Planned to recruit 500 engineers.
• 2006 – Saab bought Ericsson Microwave Systems and the remaining parts of Saab Ericsson Space,
  after the EU commission approved the deal. Stockholm City Court
  acquitted all current and former Ericsson employees of 2005 indictments for
  evasion of tax control.
• 2007 – Touted a series of firsts. For Telstra’s Next G
  network, Ericsson claimed the
  first 200km cell range in a commercial broadband network and the
  first 3G network with maximum downlinks of 14.4M bps. For Telcel, Ericsson
  said it integrated the first
  3GPP standardized Mobile Switching Center (MSC) Pool. Ericsson made three live demonstrations
  it
  claimed were firsts: Long Term Evolution (LTE), MBMS system for
  Mobile TV, and IMS VoIP over HSPA. Separately, Ericsson’s profit
  warnings late in the year sent shares tumbling.
• 2008 – As profits slumped,
  Ericsson’s CEO Carl-Henric Svanberg said the company will
  cut 4,000 jobs, even though the original figure was noted at 1,000 in
  the 2007 financial report.

• 2008 – Exited the enterprise PBX market by
  divesting the unit to Aastra Technologies.

• 2009 – Formed the ST-Ericsson joint venture with ST
  Microelectronics for mobile platforms and wireless semiconductors. Inked a seven year outsourcing deal with Sprint
  Nextel, worth up to $5 billion USD. Sales slump at the Sony Ericsson business
  unit.

• 2010 – Hans Vestberg replaced Svanberg as president and CEO. In
  June, Ericsson acquired Nortel’s majority shareholding in the Nortel-LG
  joint venture for mobile equipment, renaming it LG-Ericsson.

• 2011 – Sony agreed to buy Ericsson’s share of their ailing
  mobile phone joint venture, Sony Ericsson, after a period of global
  restructuring and workforce reduction.

• 2012 – STMicroelectronics agreed to exit as a shareholder from the
  ST-Ericsson joint venture. Ericsson raised its stake in LG-Ericsson to 75
  percent and renamed it Ericsson-LG. During the year, Ericsson also purchased
  Telcordia.

• 2013 – Ericsson continued to pursue a buyer for a share of its
  former joint venture with STMicroelectronics.

• 2014 – Ericsson settled patent lawsuits with Samsung,
  to which Ericsson will pay license fees. Separately, India widened a probe into Ericsson’s
  high pricing of its license fees.
• 2015 – Ericsson and Apple reached a settlement over
  their year-long mobile patent dispute. Apple agreed to pay "ongoing
  royalties" over the next seven years for a "broad" range of patents required
  for 2G, 3G, and 4G technology, including LTE. Also in 2015, Ericsson signed
  an agreement to acquire digital video development company Envivio for
  approximately $125 million USD.
• 2016 – Ericsson and Verizon Communications formed an alliance to
  develop 5G wireless standards along with numerous communications developers
  and providers.
• 2017 – Börje Ekholm was named President and CEO,
  effective January 16. After posting continued losses in the previous year,
  Ericsson halted its stock plan indefinitely.
• 2018 – Ericsson announced a $3.5 billion deal to support
  T-Mobile’s nationwide 5G network deployment by providing hardware and
  software. Ericsson said in September that it would acquire CENX, a vendor
  in closed-loop automation and service assurance technologies. Ericsson, in
  conjunction with an equity firm, agreed to spin its Medial Solutions
  business into a separate company. 
• 2019 – Ericsson is fined $1 billion by US authorities for foreign
  bribery violations. Ericsson acquired Kathrein’s antenna and filters
  business to expand its Radio System portfolio. The company also divested
  its majority stake in MediaKind.
• 2020 – Acquired Cradlepoint, a US-based carrier
  equipment manufacturer that provides cloud-delivered wireless edge solutions for branch, mobile,
  and IoT networks, for $1.1 billion.
• 2021 – Ericsson and Samsung reached a multi-year
  agreement on global patent licenses between the two companies, including
  patents relating to all cellular technologies. The cross license agreement
  covers sales of network infrastructure and handsets from January 1, 2021. In November, the company announced its biggest deal ever,
  agreeing to buy cloud-communications provider Vonage Holdings Corp. for $6.2 billion to expand its wireless enterprise business and
  broaden its global offerings.

Strategy

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Ericsson employs a focused strategy that it is using to lead
the company through the 2020s and beyond.
This strategy is designed to center around its customers’ priorities and has
three main pillars: 

Technology Leadership. Ericsson expects
to drive innovation and solutions ahead of its competition so that its customers
have advantages. In addition, this will be a main focus in terms of cost as the
latest technologies will enable Ericsson to lower overall costs in
products. 

Product-Led Solutions. Ericsson says that hardware and
software are the core focuses for customer solutions. This focus is on
pre-integrated solutions that promote scalability and simplicity in product use.
The vendor also offers complementary services, including installation and system
integration to support its product lines. 

Global Scale and Skill.
Strong relationships with customers is key to Ericsson’s business as is the
wealth of talent within its organization. 

Ericsson’s business is divided
into four key areas: 

Networks. The vendor provides the actual
hardware, software, and services to build networks. 

Digital Services.
This software-driven business is focused on enabling customers to operate,
control, and monetize their networks. 

Managed Services. Ericsson operates
customer networks so that clients can target the services that drive their own
businesses. 

Emerging Business. The vendor identifies
new ways to drive revenue streams for customers.

Strengths

Ericsson is at the
forefront of a collaboration between multiple telecom providers, including
Verizon Wireless, and technology developers to create 5G technology that will
meet future demand for global wireless calling, data, and streaming media on
smartphones. 

Ericsson is focused on delivering
new and innovative technologies and offers a diverse portfolio of products and
services, which include Internet of Things solutions. 

Weaknesses

The US Justice Department fined Ericsson $1 billion to resolve probes into
corruption, which included bribing officials. These incidents occurred in China,
Vietnam, Indonesia, Kuwait, and Djibouti and took place over many years. The
fine includes a criminal penalty of over $520 million and about $540 million to
be paid to the Securities and Exchange Commission. Ericsson admitted that
beginning in 2000 and continuing until 2016, the company had conspired to
violate the Foreign Corrupt Practices Act (FCPA) and took part in paying bribes,
falsifying books and records, and failing to implement appropriate internal
controls for accounting.

Outlook

Moving forward, Ericsson sees itself as a leader
in the global effort to meet demand for wireless innovation that seems to have
no limit. The company has been heavily involved in the development and rollout
of 5G technology. Ericsson anticipates the global number of 5G subscriptions to
be around 2.6 billion by late 2025. By that time, Ericsson expects 5G to cover
up to 65 percent of the global population and handle 45 percent of global mobile
data traffic. Ericsson has 78 commercial 5G agreements
or contracts with communications service providers, 31 publicly announced 5G
contracts (including T-Mobile, AT&T, and Verizon in North America;
Vodafone UK, Vodafone Germany, Telenor Norway, and Swisscom in Europe; Telstra
and Optus in Australia; and KDDI and SoftBank in Japan), and is live with 24 5G
networks around the world.

Product
Lines

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Ericsson delivers network infrastructure to telecoms around the globe. Table 1
illustrates Ericsson’s product and service offerings.

 

Competitors

• Amdocs: https://www.amdocs.com/ 
  Cisco: https://www.cisco.com/
• Huawei: https://www.huawei.com/ 
  Netcracker: https://www.netcracker.com/ 
  Nokia: https://www.nokia.com/
  Samsung: https://www.samsung.com/ 
  ZTE: https://www.zte.com.cn/ 

Activity

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Mergers, Acquisitions, and Divestitures

Ericsson has entered into an agreement to acquire Vonage Holdings Corp. for $21 per share,
a total acquisition price of approximately $6.2 billion. The transaction builds upon Ericsson’s stated intent to expand globally in
wireless enterprise, offering existing customers an increased share of a market valued at USD 700 billion by 2030. Vonage has a strong
track record of growth and margin evolution, posting sales of $1.4 billion in the 12 month period ending September 30, 2021. On completion,
Vonage will become a wholly owned subsidiary of Ericsson and will continue to operate under its existing name. Vonage’s 2,200 employees,
headquartered in Holmdel, New Jersey, will remain with the company and its CEO, Rory Read, will join the Ericsson Executive Team, reporting
to CEO Börje Ekholm.

(11/22/2021)

Products and Services

Ericsson has entered into a strategic partnership with Telarus, the largest privately held
master agent in the US, to market Ericsson Wireless Office through its ecosystem of technology consultants. Ericsson Wireless Office
removes the dependency of in-house IT expertise, physical installments, and devices while providing reliable and secure network access
anywhere and anytime. The embedded security framework delivers a secure remote access service that lets businesses protect their
applications from Internet threats while maintaining control and governance of access over their contractors, partners, vendors, and
employees. Ericsson is targeting the $90 billion small and medium business (SMB) market in the US with this 5G-ready virtual workspace
service designed to address the needs of more than 6 million companies, representing 40 percent of the US workforce.

(05/04/2021)

Ericsson announced it further accelerated 5G speeds with single user multiple input
multiple output (SU-MIMO) by delivering a single user uplink data rate of 315 megabits per second (Mbps). This is 15 to 20 times
faster than the typical uplink speed. The company claims that with uplink data rates at that speed, consumers will be able to more
quickly share 4k/8k video content captured by 5G mobile devices, thereby helping deliver on the promise of 5G to enable movie-quality
video directly from users and further democratize content creation.

(04/14/2021)

Alliances and Joint Ventures

Viaero Wireless, a regional telecommunications company that has served parts of the Midwest and western
US for more than 30 years, has selected Ericsson to replace and upgrade its existing LTE equipment to
end-to-end 5G-ready products and solutions. With this modernization, Viaero will be able to offer upgraded mobility and broadband services,
which will result in improved customer experience for their subscribers. Under the agreement, Ericsson will replace existing core, radio access
network (RAN), microwave, and router equipment across more than 900 LTE sites in Viaero’s network, allowing Viaero to expand its connectivity
footprint, reach more customers, and continue delivering high-speed internet to rural America. Headquartered in Fort Morgan, Colorado, Viaero is
one of the largest regional carriers in the country, covering parts of Colorado, Nebraska, Wyoming, and Kansas.

(09/20/2021)

Ericsson announced a landmark multi-year agreement with Verizon
to provide 5G solutions to accelerate the deployment of Verizon’s next-generation 5G network in the US. Under the $8.3 billion agreement,
Verizon will deploy Ericsson’s 5G Massive MIMO C-band, low-band and millimeter wave (mmWave) solutions to enhance and expand Verizon’s 5G
Ultra Wideband coverage, network performance, and user experience. Ericsson’s technology solutions, including Massive MIMO, Ericsson Spectrum
Sharing and Ericsson Cloud RAN, are part of the high-performing Ericsson Radio System portfolio to support 5G services.

(07/16/2021)

Google Cloud and Ericsson have entered a partnership
to jointly develop 5G and edge cloud solutions to help communications service providers (CSPs) digitally transform and to unlock new
enterprise and consumer use cases. The joint offering will help enterprises in the automotive, transportation, manufacturing, and other
sectors improve efficiencies and lower latency by bringing connectivity close to companies’ physical locations. The firms are working
together at Ericsson’s Silicon Valley D-15 Labs, a state-of-the-art innovation center where advanced solutions and technologies can be
developed and tested on a live, multi-layers 5G platform. Ericsson and Google Cloud have already completed functional onboarding of Ericsson
5G on Anthos to enable telco edge and on-premise use cases for CSPs and enterprises.

(06/29/2021)

AT&T and Cradlepoint, part of the Ericsson Group, are expanding their
joint network offerings with one of the first and the most comprehensive portfolios of 5G solutions in the US using AT&T Wireless Broadband. This
will be the first nationwide business-focused broadband network with 5G coverage reaching more than 230 million people in 14,000 cities and towns.
The new solutions combine clean-slate-designed Cradlepoint 5G wideband adapters and routers and its NetCloud Service with AT&T’s nationwide wireless
broadband network, data plans, and an AT&T management option for Cradlepoint devices.

(05/03/2021)

Verizon has begun installation of C-band equipment from Ericsson
to speed deployment of its 5G Ultra Wideband and fixed wireless broadband service on its recently acquired C-band spectrum. Verizon secured an
average of 161 MHz of C-band spectrum nationwide in a recent FCC auction, which will allow the company to offer expanded mobility and broadband
services to millions more consumers and businesses. Deploying 5G Ultra Wideband on this spectrum requires new network equipment including basebands,
radios, and antennas to be placed on existing towers. Verizon tapped Ericsson to supply the Radio Access Network (RAN) equipment for this massive
deployment.

(04/19/2021)

Ericsson has been selected by T-Mobile for a five-year 5G rollout contract that
will leverage Ericsson’s high-performing 5G portfolio and entire spectrum portfolio to deliver T-Mobile’s 5G services. Per
the agreement, Ericsson will expand and enhance T-Mobile’s 5G footprint by supplying equipment, software, and related services
from the Ericsson Radio System portfolio. This includes active and passive antennas, providing T-Mobile with support across its
entire spectrum portfolio, low-band for far and wide coverage indoors and outside, and Massive MIMO capacity over mid-bands and
high-bands.

(01/14/2021)

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