Thursday, February 1, 2007

Ericsson Estimates 2.7 Billion Mobile Users Worldwide, Forecast Single Digit GSM Market Growth in 07

Ericsson reported quarterly net sales SEK 53.7 billion, up 18% year-over-year, with growth in infrastructure and services. For the full year sales were SEK 177.8 b. with a growth of 17%, positively impacted by the added Marconi sales. Growth was especially strong in professional services with a sales growth of 30% for the full year.

Gross margin, excluding restructuring charges, was stable sequentially at 41.8% (44.2%), reflecting high level of network rollout and initial network build-outs. The full year gross margin was 42.2% (45.7%), excluding restructuring charges.

"We have concluded another successful year and see continued opportunities to outpace the market," said Carl-Henric Svanberg, President and CEO of Ericsson. "Our financial strength has enabled us to execute our strategy of organic growth and own development in combination with bolt-on acquisitions. During 2006, we successfully integrated Marconi into our operations, including reaching expected profitability. We also recently announced the acquisition of Redback Networks in a move to further enhance our strong all-IP offering."

Svanberg also noted some milestones in telecom:

  • In 2006, the growth of net mobile subscriptions continued with close to 150 million in the quarter and 500 million during the year.

  • At the end of 2006, worldwide subscription penetration reached 41% with more than 2.7 billion subscriptions in total, of which more than 2.2 billion are GSM/WCDMA.

  • The number of WCDMA subscriptions almost doubled during 2006 to nearly 100 million at year-end. The figure is expected to pass three billion subscriptions during 2007.

  • For 2007, Ericsson expects the GSM/WCDMA track within the global mobile systems market, measured in USD, will continue to show mid-single digit growth -- the same as for 2006.

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