The CFO of Ericsson said investments the company has been making in TV and media should result in revenue growth “quite soon” as he unveiled Q3 financials.

Jan Frykhammar said deals the vendor has struck with AT&T in the US and the BBC and BT in the UK were evidence that it was on the right track.

Sales, adjusted for comparable units and currency, at Ericsson’s Support Solutions division, which includes its TV and Media assets, fell eight percent in the third quarter.

Lower software licensing sales were the cause, the company said.

Ericsson has been busy acquiring a range of businesses in the TV and media space; last month, it announced video encoding provider Envivio was the latest to join its ranks.

Although total reported revenues increased by three percent to SEK 59.2 billion (€6.3bn), adjusted sales were down nine percent due to lower sales in the company’s Networks division.

Adjusted Networks sales fell 15 percent as the vendor noted a slowdown of 4G deployments in mainland China, as well as a slower pace of mobile broadband investments in a number of markets.

Revenues in Northern Europe and Central Asia were down by a fifth due to “continued low investment levels” in Russia, while a 10 percent fall across North East Asia was down to reduced spending by Japanese operators.

India was the star performer, with revenues there up 81 percent, but Frykhammar warned that year-on-year comparisons would be much tougher in 2016.

Adjusted sales in Ericsson’s Global Services arm fell two percent due to a decline in network rollout deals.

Net income rose by 19 percent to SEK 3.1 billion (€329 million), partly due to lower operating expenses.

Ericsson said its cost and efficiency program, which is targeted to achieve annual net savings of SEK 9 billion (€955 million) during 2017, is progressing “according to plan”.
It revealed close to 5,000 employees left the company during the quarter.

Frykhammar said “big changes” within the industry meant corresponding changes were required to its competence base.

President and CEO Hans Vestberg commented: “There is an increased customer interest in future network architecture for 5G, virtualization, efficient video delivery and internet of things (IoT).

“With our ongoing strategic initiatives, we are well positioned to create value for our customers and shareholders in a transforming market.”

 

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