By Diana ben-Aaron - Oct 20, 2011 12:58 PM GMT+0700
Oct. 20 (Bloomberg) -- Sandy Shen, an analyst at research firm Gartner Inc., talks about the outlook for China Mobile Ltd. and the nation's telecommunications industry. Shen speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Ericsson AB, the world’s largest maker of wireless networks, reported third-quarter profit that beat analyst estimates as phone companies in Latin America and China increased spending.
Net income climbed to 3.82 billion kronor ($573 million) from 3.68 billion kronor a year earlier, Stockholm-based Ericsson said today in a statement. Analysts had predicted profit of 3.66 billion kronor, the average of 21 estimates compiled by Bloomberg. Sales rose 17 percent, also topping estimates.
North American carriers such as AT&T Inc. and Verizon Communications Inc. spent less than before to fortify their networks for increasing numbers of smartphone and tablet users, while those in other regions stepped up their additions of capacity. Ericsson increased its proportion of network modernization projects in Europe, which have smaller margins than new buildout.
“Our performance year-to-date reaffirms our indications of a strengthened global market share,” Chief Executive Officer Hans Vestberg said in the statement. Sales were driven by services as well as demand for mobile broadband, he said.
Third-quarter revenue reached 55.5 billion kronor, beating the 52.6 billion-kronor average estimate of 30 analysts.
Global sales of wireless infrastructure equipment are expected to reach $41.3 billion this year, rising to $48 billion in 2015, market researcher Gartner Inc. said. Ericsson was the market leader in the second quarter with a share of about 40 percent, according to researcher Dell’Oro Group.
Nokia Siemens Networks and Huawei Technologies Co. compete with Ericsson for sales and maintenance of stations used by third-generation, or 3G, mobile-broadband networks and contracts for newer fourth-generation networks.
Ericsson’s contract wins in the quarter included a five- year managed services agreement with Bharti Airtel in Africa. The company also announced it will open a fourth global network operations center in China, where it has taken over field maintenance for China Mobile in one local province.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
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