The head of Swedish-based telecommunications giant Ericsson says he believes the company is well placed to come through the economic crisis despite suffering a slump in profits.
Ericsson last week reported a 56 percent drop in second quarter net income to 831 Swedish kronor ($111 million), largely due to losses in its Sony Ericsson cellphone and ST Ericsson chipmaker joint ventures and restructuring costs.
But Ericsson CEO Carl-Henric Svanberg told CNN the downturn in the company's fortunes was "much the way we had anticipated" and said the crisis also presented opportunities for growth
"We are preparing for a declining market with pretty sharp cost reductions but at the same time rememember now in the middle of this crisis we also have opportunities," Svanberg told Quest Means Business.
On Saturday Ericsson confirmed it had bought a majority stake in networking company Nortel's North American wireless business for $1.1 billion.
"We do expect our industry to be much less effected than other parts of society, because telephony is so important, both in mature and in emerging markets.
"Right now we have huge rollouts in China, in Japan, in the U.S., the world's leading economies. We have big market shares there and that's extremely encouraging."
Svanberg admitted Ericsson was performing less well in emerging markets in Africa, Latin America and central Europe but said there was still solid potential for growth.
"In these markets the underlying traffic trends and the need for upgrades are the same," he said
Svanberg said Ericsson had also improved its position in relation to its competitors.
"We have clearly been gaining market share for a number of quarters," he said. "When you look at our services improving 28 percent and our margins improving two-and-a-half percent, those are encouraging signs."
Source:CNN
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