Ericsson India posts 24% decrease in revenue to SEK 1.73 billion in third quarter of 2012
Telecom Lead India: Ericsson has posted 24 percent decrease in India revenue in third quarter of 2012 to SEK 1.73 billion from SEK 2.27 billion in the same period last fiscal.
Regulatory uncertainties and decrease in telecom Capex by Indian telecom operators have affected the financial performance of Ericsson India.
Recently, ZTE said it may consider salary cut to its India employees. Alcatel-Lucent is also planning to cut down on Indian resources.
TelecomLead.com earlier reported that the decline in active subscribers of Indian mobile operators will adversely impact telecom equipment vendors.
However, the telecom equipment major posted marginal improvement of 2 percent growth in revenue quarter-on-quarter basis from SEK 1.7 in Q2.
The QoQ improvement in Networks is driven by operator investments in areas where data traffic is growing. However, investments continued at low levels which are highlighted by the y-o-y comparison where Q311 saw large initial 3G rollouts.
Globally, total number of employees at the end of the quarter increased to 109,214 (108,095). The increase is mainly due to addition of service professionals mainly in India and the acquisition of Technicolor Broadcast Service Division. This offsets headcount reductions in other areas.
Ericsson’s global sales decreased 2 percent y-o-y.
Networks sales decreased y-o-y due to weaker sales in parts of Europe, China, Korea and Russia as well as continued decline in CDMA equipment sales. This was partly offset by strong development in North America.
Ericsson said global services increased sales 19 percent.
Hans Vestberg, president and CEO, Ericsson, said: “Demand for Global Services and Support Solutions continued to be good, while Networks showed a decline in sales y-o-y. In North America Networks sales developed favorably, despite the expected decline in CDMA sales, while parts of Europe, China, Korea and Russia continued to be slow.”
The y-o-y decline in networks was impacted by the same driver as in previous quarter, i.e. lower sales of GSM in China.
Though the transition to LTE continues, Korea declined y-o-y compared with the large 3G investments in Q311.
Services sales also showed same driver as in Q212, i.e. a strong development mainly driven by turnkey projects in Japan.
Operator in South East Asia and Oceania focus on network performance and quality has a positive impact on Global services sales. Networks sales decreased y-o-y reflecting lower activity levels in certain countries. LTE deployment is ongoing in parts of the region.