Ericsson takes huge writedown on venture to cap woeful year

ERICSSON, the Swedish telecoms giant, yesterday took an 8bn Swedish krona (£754m) writedown over its ST-Ericsson joint venture, in a bid to limit exposure to it after partner STMicroelectronics decided to pull out.

ST-Ericsson, which makes chips and other components for mobile phone manufacturers, has suffered since it came into being in 2009, partly down to the decline of Nokia, a key customer.

The writedown possibly signifies an end to the joint venture, which has lost around £1bn in the last three years. The future of the company was plunged into doubt earlier this month when French-Italian STMicroelectronics announced it would look to sell its stake. Ericsson said yesterday it would not be buying it.

Ericsson, which has had a woeful year as large telecoms projects have been put on hold, is now likely to report a third-quarter loss.