Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) Q3 2023 Earnings Call Transcript

Peter Nyquist: Borje?

Borje Ekholm: So, if we look at start with Vonage, we see basically it’s a couple of reasons for the goodwill impairment that we took. There are, of course a slowdown in the market that we’ve seen for kind of the demand trends have been softer and we see a much higher interest rates as well. When you put those two together, the impairment is the right thing to do to take that. And by the way, it also led to a lot of the peers trade is significantly lower in the market. So that’s no doubt about that and those trends have come down. We have so far grown in line or faster than competitors. But I would say, it’s fair to say that the market expectation is somewhat lower today than it was, if you look a few years back. The growth trajectory — and we believe, we’ll be in line or slightly better the market going forward as well.

But really what we are investing for is not the core business in Vonage that we really did. The impairment testing on, it is the global network platform, which will provide ample growth opportunities in the future and position Ericsson to be a completely different company in a few years time. That’s the really the underlying strategy behind the Vonage acquisition. So in a way, the reason for taking the impairment relates to the core business, but that was not really our investment this is when we acquired Vonage. So, our strategy stands firm on developing global network platform. The traction we have with customers is very strong today and the inbound interest we get from basically all operators are very exciting and I think positions as well for the future.

It’s up to us to deliver, it’s up to us to execute on that, and that’s what we’re focusing on a 100%. Missed your second question.

Sebastien Sztabowicz: On Cloud Software and Services, the growth expected 5G core, not least.

Borje Ekholm: Yes, I would say we’re still early in the 5G core deployments. It really needs to be 5G standalone to be widely deployed. And that’s so far, call it, it’s maybe some 40 and 50 networks around the world, very few. So, we are not seeing the big ramp until that happens. So, I would not hang it on there. We’ve seen some good developments in other areas of the business that actually has started to grow and that’s encouraging as well, but I would say the 5G core the future is ahead of us.

Peter Nyquist: That concludes today’s call. So, I thank you all for listening to this Q3 earnings call in 2023. So, I’m looking forward to the next call here in January. With that, have a great day. Goodbye.

Carl Mellander: Thank you.

Peter Nyquist: Thank you.

Borje Ekholm: Thank you.