Ericsson sees Middle East rebound
World’s largest telco equipment maker puts Arab Spring behind it with 4Q sales flourish
Regional sales at Ericsson rebounded 12% as the telecoms equipment giant benefited from a resurgent 4Q11 as the political situation in the Middle East cooled.
During the three-month period ending 31 December 2011, sales to telecoms operators in the region increased to SEK5.2 billion (US$763 million).
At the height of the so-called ‘Arab Spring' political unrest during Ericsson's 1Q11 and 2Q11, the company reported Middle East revenues of SEK3.1 billion (US$454 million) and SEK3.5 billion (US$513 million), respectively. At the time, Ericsson reported that its business was being impacted by the unrest occurring in these markets.
This negative effect felt on regional sales in the first half of the year meant the company's sales to Middle East operators was relatively flat in terms of full-year 2011, rising by just 2% to SEK15.5 billion (US2.27 billion).
In recent months, the company has signed major deals with regional operators including a $650 million, five-year outsourcing deal with Zain Iraq and a 3G network deployment with Orange Jordan.
"Sequentially, there was a strong development in all segments [in the Middle East]. Saudi Arabia developed especially favourably in the quarter although the region was still negatively impacted by political unrest in many countries, with operators continuing to be cautious with infrastructure investments," the company said in a statement announcing the results.
It added that LTE deployments were being made across the region, while WCDMA/HSPA "continued to develop positively across the region, resulting in positive networks sales both year-over-year, sequentially and for the full year". The statement also said that services had "developed favourably" as operators were "looking into opportunities to increase efficiencies".
On a global basis Ericsson, the world's largest maker of telecoms hardware by revenue, reported SEK63.7 billion (US$9.3 billion), 1% up from the year ago quarter. Net income fell to SEK1.5 billion ($220 million). The company attributed its unspectacular performance to weak performance in its networking business, as well as continued economic uncertainty and political unrest in some markets.