Ericsson posts $1 billion loss on write down of this US cloud company it acquired in 2022 - Times of India
Summary
Swedish telecom giant Ericsson reported a $1 billion quarterly loss, driven by a writedown on the value of its 2022 acquisition of cloud communications company Vonage . This writedown follows a similar move last year due to shifting market conditions.Ericsson acquired Vonage in the year 2022 for $6.2 billion with the aim to expand its presence in wireless enterprise and broaden its global offerings.Despite the loss, CEO Borje Ekholm defended the Vonage deal, calling it crucial for building a global network for software communication. "Vonage remains foundational to build out a global platform for network APIs," he said, referring to the interfaces which allow for different software applications to communicate. "This is critical for the digitalisation of enterprises and society, and will drive future growth in the telecoms industry," he added.Ericsson, a leader in 5G equipment alongside Nokia and Huawei, sought diversification through the Vonage purchase. However, Ericsson anticipates North American contract deliveries to boost second-half sales.The CEO emphasized the need for "refocusing on improving performance," following job cuts announced earlier this year in Sweden and globally in 2023.