Ericsson: Regulation not to blame for stunting investment


Telecoms firm rejects suggestions that roaming caps restrict networks capex

Ericsson has rejected suggestions by UK operators increased regulation is hampering investment in telecommunications networks.

EE and Vodafone have made a series of warnings over proposed EU regulations such as the ban on roaming  charges from December 2015, stating it could jeapordise future investments in network quality and roll out.

EE CEO Olaf Swantee recently  revealed more than £42 million had been wiped from its revenues in just six months – putting jobs and future investment at risk, whilst Vodafone estimates roaming cuts will wipe around £1 billion from its group revenues when the rules come in.

However, Ericsson, which provides the network infrastructure for 40 per cent of the world’s mobile traffic says regulation is not being reflected in their business.

This is evident in the firms most recent second quarter financial results, which show sales were down just one per-cent year-on-year to around £4.6 billion.

Ericsson chief strategy officer Rima Qureshi (pictured) revealed during its recent ‘Ericsson Business Innovation Forum in Stockholm.

“I wouldn’t say there is an impact on Ericsson’s business, if you look at the projects that are happening. The operators are investing. Vodafone Spring (the operator’s £1 billion investment programme) is one example.

“There is definitely a correlation between performance of the network and profitability of the operators. To be able to differentiate, they have to be able to offer better performance and more opertors are beginning to realise that. It is very beneficial for the operators and it’s also good for Ericsson.”

Infonetics Research says spending per capita on EU telecoms infrastructure has fallen far behind the USA in the past decade. In 2004, £67.95 was spent per head in the USA compared with £65.28 for the EU. Since then, the gap has widened to £149.12 and £75.44 respectively.