Ericsson revenue down 9 per cent year on year

Ericsson hopes for mobile broadband pickup to drive profits

Swedish telecommunications manufacturer Ericsson has reported first quarter 2010 revenue down nine per cent at SKr45.1bn (£4.1bn) year on year.

Profits slid 30 per cent on the same period last year, but increased 76 per cent sequentially to SKr1.3bn (£117m).

President and chief executive of Ericsson Hans Vestberg said: "Voice related sales, such as 2G, continued to decline in the quarter but were partly offset by increased 3G sales."

Vestberg expressed confidence in the fact that the increase in mobile data traffic would help Ericsson back to profitability, he said: "During the quarter, mobile data traffic continued to increase, mainly in North America and Western Europe, driven by increased consumer usage of smartphones and other devices. Mobile data traffic will double annually over the next five years."

Market research outfit Infonetics Research's recent report on mobile backhaul equipment and services, corroborates Vestberg's forecast, and predicts the mobile backhaul equipment market will grow to $10.4bn (£6.8bn) by 2014.

According to Infonetics figures, mobile backhaul equipment spending increased 21 per cent in 2009, to $7.2bn (£4.7bn) worldwide.

Infonetics principal analyst and co-founder Michael Howard said: "We see no slowdown in the mobile backhaul equipment market."

Infonetics also forecasts almost 1.5 billion new mobile subscribers and about 1.2 billion new mobile broadband subscribers between 2010 and 2014.

This will require more base stations, more cell site connections, higher backhaul capacities, and equipment for each cell site connection according to Infonetics.