In light of several of its more lucrative markets showing indications of slowing down, Swedish telecom equipment manufacturer Ericsson announced on Thursday that it will only achieve the lower end of its long-term aim of a profit (EBITA) margin of 15 to 18 percent by 2024.
The market for 5G radio equipment is expected to increase by 11% annually over the next three years, while the entire market is expected to remain flat, according to the business, one of the leading providers of 5G technology in the world.
On the company’s capital markets day, CEO Borje Ekholm informed investors that “several of our customers, especially in North America, are guiding for lower expenditure following a very fast build out at the beginning of 2022.”
Ericsson anticipates that emerging countries like India would help it offset some of the weaker demand for 5G equipment while the US and other markets are slowing down.
By the end of 2023, the corporation wants to reduce costs by 9 billion crowns ($1.3 billion). After Ekholm assumed leadership in 2017, Ericsson implemented significant cost-cutting measures, let go of thousands of people, and prioritised research to help the business turn a profit.