Peter Nyquist: Thanks, Börje, and thanks, Josef. We will move to the next question. And the next question is from Jakob Bluestone at BNP Paribas Exane. Good morning, Jacob.
Jakob Bluestone: Good morning. Thanks for taking my questions. I have two, please. Firstly, on the AT&T contract, we heard from Nokia that price was a big part of the reason that lost the contract. I’d just be interested in here from your point of view to what extent do you see these types of ON [ph] contracts as being deflationary overall? And then just secondly, staying with the AT&T contract. You mentioned rightly that it’s a historic contract. I was interested in hearing are you seeing more demand for these types of contracts since you announced it? So is there any sort of read across to other contract wins? Thank you.
Börje Ekholm: It’s always interested when competitors apparently know everything. So you can question how much they know sometimes, to be honest. But if you look at the contract like the one we’re talking about, I think it’s – where – how does this actually work? It’s all about looking at the total CapEx, OpEx envelope and actually optimizing that total cost. So you make sure that you can invest in technology in order to actually increase the portion of that cost envelope that goes into revenue-generating equipment. And that is what this is all about. So it’s about putting a technology in place that allows a much more efficient call it, rollout and operation of that network, and that’s what we’re doing together with AT&T. So the substantial benefit here is actually that it allows within the CapEx envelope, a faster rollout, but that is really created by leveraging new technologies.
So we’re putting new energy savings features in place, multi-band radios in place, standardized sites in place, et cetera. All of those contribute to make as much of the capital go into productive equipment as humanly possible. That’s really our competitive advantage, and that’s why that contract is so important. Then that’s the reality, and that’s the fact. That’s why it’s value-creating for us, but it’s also value-creating for our customers. So this is a way, I think, for the future that’s going to show to be more interesting. I think this – it’s hard to say. I mean we have a lot of interest to look at similar type of solutions for the future. But that’s – we’ll see. It’s too early to say that that’s going to be a lot of contracts coming, but we’re seeing a great interest in exploring similar type of solutions for the simple reason that it actually reduces the nonstrategic spend.
And you now think about the normal network, right? It’s kind of a lot that goes into, I call it, concrete and towers, right? But the reality is it’s in passive equipment. It’s in truck rolls going back and forth to sites. It’s in energy costs, et cetera. All of that we like to put into active equipment instead, and that’s what we’re doing in this contract. I think it’s a model for the future and can create a big potential for us.
Peter Nyquist: Thanks, Börje. We’ll move to the next question, which comes from Sandeep Deshpande at JPMorgan. Good morning, Sandeep.
Sandeep Deshpande: Good morning. My question, I mean, in your forward-looking statements, you’ve given the guidance of Deloro [ph] for the full year, and Deloro seems to have growth for the U.S. market this year in FY ’24. Is that your view on the U.S. market given where the starting point is at this point? And if that is not, would there not be further risk to the top line into ’24?
Börje Ekholm: Yes. So we do believe that there is a good chance that North American investments will start. But we are careful in saying here that it’s in the hands of the operators. We don’t – we don’t want to be precise in putting any commitments for that out there. We also see Deloro’s expectation that North America coming from a record high level in 2022, down to probably unsustainably low level of investment in ’23, so increases growth again in 2024. And we believe that, that’s a reasonable expectation.
Carl Mellander: Yes. I would just echo that. And – but I think what we’re trying to do is also to make sure that we plan for a challenging market. I think that’s the prudent way to plan our costs on our side to make sure that we’re as lean as possible. And then when the market recovers, we have our technology investments, so we are at the leading edge there, combined with a very efficient cost structure because when that recovery comes, whether that’s in the beginning of ’24, the end of ’24 and ’25, but we’re at least well positioned when it comes. And that’s really what we’re here to do because then we can succeed longer term.
Peter Nyquist: Thanks, bro. So we are moving now to the last question for this session. And that one is from Sebastien Sztabowicz from Kepler Chevreux. Good morning, Sebastien.
Sebastien Sztabowicz: Hello. Thanks for taking my question. On the gross margin in networks, you’ve seen quite nice step-up, thanks to positive mix in Q4. How we should think about the gross margin in networks moving to 2024? What are the puts and takes for the coming quarters here? And the second one, on the Cloud Software & Services, you have strongly recovered in the fourth quarter. We know there is a strong seasonality in this business. But looking at 2024 and beyond, where do you see your EBITA margin moving in Cloud Software & Services? Do you have any indication of the trend there? Thank you.
