Ericsson India revenue dips 25% to $195 million in second quarter

Telecom equipment maker Ericsson India revenue decreased 25 percent to $195 million (SEK 1,279 million) in the second quarter of 2013 against SEK 1,700 million in the same period previous year.

Sequential growth of Ericsson India was 13 percent.

Ericsson India on Thursday said business volumes declined as operators continued to invest cautiously mainly due to sustained regulatory uncertainty and weak macroeconomic development. The growth in services was driven by a new managed services contract.


The company’s networks business in India contributed SEK 484 million in Q2, down 48 percent. It support business decreased 36 percent to SEK 76 million.

Due to regulatory issues and unfavorable market conditions, several telecom service providers (telecoms) has stalled their expansion plans.

For instance, India’s #1 telecoms Bharti Airtel earlier said it would focus more on revenue generation than telecom Capex this year. Airtel is going to lower its Capex in India in 2013.

Bharti Airtel’s total Capex for telecom infrastructure — network upgradation and fresh investment — in FY 2014 will be around $2.2 billion against $2.5 billion in FY 2013. Out of this, $1.6 billion will be invested in India and South Asia and $600 million in Africa. In Q4 FY 2013, Airtel’s total Capex was about $650 million.

In India, the telecom Capex will be focused on 3G network expansions and filling the gaps in the 2G network. For Bharti Airtel, the main priority is to grow its revenue much faster than the telecom industry in India. Besides Ericsson India, this sentiment would affect telecom vendors such as Nokia Siemens, Huawei, ZTE, Alcatel-Lucent, etc.

Ericsson India’s global services’ revenues were SEK 719 million, up 11 percent in the second quarter.

The employee base of Ericsson India rose to 16,183 in Q2 from 14,588 in Q1.

Ericsson’s global sales were flat at $8.4 billion (SEK 55.33 billion) from SEK 55.32 billion.

The telecom equipment major said the quarter was negatively impacted by one-time items of SEK -0.9 billion from losses due to divestments and exiting the telecom and power cable operations.

The company’s net income was SEK 1.5 billion against SEK 1.2 billion.

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