3G investments finally start paying dividends for Ericsson

14 Sep 2004

Ericsson looks set to cash in on the big investments it has made developing next generation technologies as its major customers finally start spending big on 3G, some two years behind schedule. The vendor saw its sales in Western Europe rise year-on-year for the first time in 14 quarters, helping steer it to a net profit of SEK5.3 billion (USD715 million) in the three months to the end of June, compared to a SEK2.7 billion loss a year earlier. Whilst Ericsson received a much needed boost due to its largest customers, including Vodafone, belatedly rolling out their 3G networks, handset manufacturers such as LG Electronics are paying the company licence fees and royalties for utilising its technology in their own 3G handsets. Ericcson has also been picking up business in emerging markets, such as Kyrgyzstan and Liberia, and has won more than USD300 million worth of contracts in Nigeria since the start of 2003.