Ericsson CEO: 'This is not a telecom crisis'

“This is not a telecom crisis—this is a financial crisis that has turned into an economic slowdown,” Svanberg said today at Ericsson’s fourth-quarter earnings call. “If we look at our own market, operators are in good shape…So far we’ve hardly seen any effect at all on mobile network investments. We’re seeing effects on the fixed side. People are abandoning their fixed-line phones, but they are keeping their mobiles.”

Svanberg backed up his bold statements with impressive sales numbers. Ericsson reported a 23% increase year-over-year in fourth-quarter revenue, though its profits suffered to the tune of a 39% drop, primarily due to heavy declines for its handset venture with Sony. Sony Ericsson last week reported a 185 million-euro loss as phone shipments fell 21% in 2008. Analysts anticipate dismal sales numbers from the other handset makers this year as consumer spending dries up. While Svanberg acknowledged that the global phone and device market is suffering--particularly the replacement handset market—he said those losses aren’t having a direct effect on network growth. Growth is particularly strong in the US, which is enjoying somewhat of a renaissance in mobile data services driven in part by the Apple iPhone and other smartphones. Ericsson reported fourth-quarter sales growth of 13% in North America and 34% growth for the fiscal year. In the US, Ericsson is building T-Mobile’s new high-speed packet access (HSPA) network as well as expanding and upgrading AT&T Mobility’s.

“It’s all being driven by the consumer demand for mobile broadband,” Svanberg said of the North American market. “Everybody wants mobility wherever they are now, and there’s a lot of focus on the continued rollout of HSPA and expansion.”

Ericsson CEO: 'This is not a telecom crisis'