Ericsson, the world’s largest provider of mobile network equipment, posted strong first-quarter results and struck a decidedly optimistic stance toward future mobile operator spending, the New York Times reports.
The company’s net income more than doubled in the first quarter, primarily on gains from the sale of its stake in its joint venture with Sony and demand from operators in Latin America, China and Southeast Asia. The company said it also saw reviving demand in North America. In announcing the results, CEO Hans Vestberg, who in a previous earnings report warned operators were likely to remain cautious spenders in the short term, said the company is now more optimistic than before and expects stronger spending by mobile operators.
Yankee Group Research VP Declan Lonergan comments
“Regional economic conditions will have a major effect on telecom infrastructure investments during the next one to two years. The migration to 4G networks will give spending a boost in most markets, but in several European countries for example, this will be tempered by operator caution due to ongoing economic uncertainty. The net result is that several European operators will delay capex expenditure, and this will continue to hurt Ericsson, Alcatel-Lucent and Nokia Siemens Networks in particular. Elsewhere in the world, however—as is evident from the Ericsson commentary—the immediate future look a little brighter for wireless infrastructure players.”
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