Telecom Lead Asia: Ericsson has posted 5 percent increase in revenue from Indian operations at SEK 1.6 billion in Q4 2012.
For the full year of 2012, Ericsson India’s revenue declined 34 percent to SEK 6.5 billion, primarily due to less Capex spend by local mobile service providers.
Ericsson India experienced continued low activity levels with operator investments only in certain areas. Data traffic is growing from a low base as smartphones and tablets become more affordable. Growth in Support Solutions y-o-y was driven by Telcordia.
In Q4 2012, Ericsson India generated SEK 0.9 billion revenue from networks business, SEK 0.6 billion from global services and SEK 0.1 billion from support solutions.
Ericsson India said the full year decrease is mainly due to large initial 3G deployments in the first three quarters of 2011.
Ericsson, announcing the financial result for 2012 and Q4 2012, said that its organic and FX adjusted sales decreased -12 percent, primarily due to lower sales in China, Russia, India and South Korea. However, North America grew despite the -40 percent decline in CDMA equipment sales. During 2012 the company saw good contribution from IP portfolio, particularly packet core.
Ericsson’ global revenue
Ericsson posted flat growth in full year revenue to SEK 227.8 billion.
Sales in the fourth quarter increased 5 percent y-o-y.
The acquired Telcordia operation added sales of SEK 1.1 billion in the quarter.
Ericsson said its networks sales increased 6 percent, primarily driven by North America where sales in the second half 2011 were slower. CDMA equipment sales were down -18 percent to SEK 2.5 billion in the quarter.
CDMA equipment sales increased 58 percent q-o-q, primarily due to temporary capacity needs but are expected to continue to decline as North American operators continue their transition to LTE.
Income from global services grew 4 percent y-o-y. Global Services represented 42 percent (42 percent) of Group sales in the quarter, compared to 45 percent in Q312.
Support Solutions sales increased 6 percent y-o-y. IPX was divested in Q3 2012 impacting sales growth q-o-q negatively.
In full year, software represented 23 percent (23 percent), hardware 35 percent (40 percent) and services 42 percent (37 percent) of total sales.
Ericsson’s net income decreased to SEK 5.9 billion from SEK 12.6 billion due to lower contribution from Networks and the negative impact from ST-Ericsson of SEK -11.7 (-2.7) billion.
Hans Vestberg, president and CEO, Ericsson, said: “Our segments showed mixed developments during the year with strong growth in Global Services and Support Solutions, while Networks had a more challenging year. Support Solutions went from losses in 2011 into profitability and together with Global Services represented close to 50 percent of Group sales in 2012, compared to 42 percent in 2011.”
During the year profitability was negatively impacted by operating losses in ST-Ericsson, the ongoing network modernization projects in Europe as well as the underlying business mix, with a higher share of coverage projects than capacity projects. With present visibility of customer demand, and with the current global economic development, underlying business mix is expected to gradually shift towards more capacity projects during the second half of 2013.
