Ericsson says change is looming ( 2003-11-28 23:53) (China Daily)
The telecom downturn that
started in 2000 is nearing an end, according to a senior executive from the
world's biggest wireless communications equipment business.
"We are in the final phase of correction after the information technology
bubble burst three years ago,'' said Carl-Henric Svanberg, president and chief
executive officer of Ericsson.
He predicted at the Ericsson Strategy and Technology Summit in Beijing on
Thursday that this year's wireless communications market will decline 10 per
cent year-on-year -- but that it is a big improvement over last year's 15 20 per
cent decrease.
In 2004, the industry will stay at this year's level, Svanberg said.
The Swedish-based group reported its first pre-tax profits in almost three
years on October 30.
Ericsson said that, without the expenses of its massive cost-cutting
programme, it earned 1 billion Swedish kroner (US$129.5 million) for the third
quarter, compared with a loss of 3.6 billion kroner (US$464 million) a year ago.
"You will see steady improvement and profits,'' Svanberg said.
He added the company will continue to develop powerful products, while
improving cost-efficiency and a supply chain.
The telecom system supplier also said it will develop a common solution for
WCDAM (wideband code division multiple access) and CDMA 2000, two major
third-generation (3G) mobile communications standards in the world.
The solution is believed to save Ericsson's research resources and cut the
investments and risks of telecom operators.
The Swedish firm is the biggest 3G equipment supplier in the world, with 44
WCDMA commercial contracts and 15 CDMA 2000 contracts.
Ericsson, already an active participant in the 3G testing organized by the
Chinese Ministry of Information Industry, is also working with the research
institute of Shanghai Telecom on several projects in East China, according to
Jan Malm, president of Ericsson China Co Ltd.
He revealed that his company is reviewing the possibility of setting up
another venture in Southwest China's Sichuan Province, which could be announced
early next year.
He declined to disclose details, but it could be another research and
development (R&D) base.
Currently, the firm has four wholly owned businesses and 10 joint ventures.
Malm said although Ericsson is a little behind its five-year plan for
development in China, which aims to double its business locally from 2001-05,
the blueprint will not be changed.
"We are behind our goal in terms of purchasing, but... it depends on how the
market works,'' said Malm.
"On the other hand, Ericsson is also ahead of its schedule in investment of
research and development.''
The company announced earlier this year that its total investment in R&D
in China will be US$500 million from 2001 to 2005.
