Wednesday 17 July 2019 9:31 am

Ericsson quarterly profit meets expectations as 5G rollout picks up pace

Ericsson has posted second-quarter profit in line with expectations and said it was on track for the full year as it looks to expand its 5G rollout.

Read more: UK’s approach to Huawei makes no sense, warns Ericsson boss

The Swedish telecoms firm posted a 10 per cent rise in net sales to 54.8bn Swedish krona (£4.7bn), while operating profit grew to 3.7bn krona, up from 0.2bn the year before.

Ericsson, which is one of the main suppliers of equipment for 5G equipment alongside Huawei and Nokia, said it expects to meet its targets for 2020.

Some analysts had expected Ericsson to upgrade its targets for the full year after the firm posted a string of strong quarterly results, boosted by rising 5G demand.

“We see strong momentum in our 5G business with both new contracts and new commercial launches as well as live networks,” said president and chief executive Borje Ekholm.

“To date, we have provided solutions for almost two-thirds of all commercially launched 5G networks.”

Ericsson said its deployment of 5G networks in part of Asia will impact margins negatively in the short term, but said it would pay off in the long term.

The Swedish firm could be set to benefit from a crackdown on rival Huawei, which is facing a ban in the US over spying fears.

But Niklas Heuveldop, Ericsson’s North America chief executive, has warned the UK’s plan to ban Huawei from parts of its 5G network made little technical sense.

Read more: Ericsson slashes losses thanks to cost-cutting and growing 5G demand

He argued the Chinese company should not be excluded from 5G networks, and said uncertainty over its role was harming confidence in the industry.

Main image credit: Getty