Swedish telecommunications equipment manufacturer Ericsson witnessed a nearly 40% sequential decline in sales in India during the fourth quarter of 2023 as the market transitioned to normal investment levels following an unprecedented rollout pace. While sales exhibited a 14% growth compared to the same period in the previous year, the reduction in capital expenditure (capex) investments in India occurred earlier than initially anticipated, according to a statement released by the company on January 23.
Ericsson attributed the growth in sales to 5G contracts, as the Indian telecom market experiences aggressive 5G rollouts by private operators. Despite the slowdown in India, the country secured the second position among the top five countries in net sales, contributing 12% after the United States during the January-December 2023 period. In the fourth quarter, India maintained an 8% share among Ericsson’s top five markets.
The mobile network industry is expected to face ongoing challenges, with market uncertainties prevailing into 2024 and a decline in the radio access network (RAN) market outside China. Ericsson President and CEO Börje Ekholm stated that customer caution and the normalization of investment pace in India are contributing factors. The company anticipates the new US contract to ramp up in the second half of 2024.
Ericsson reports local sales under the market South East Asia, Oceania, and India. Sales in this market area, adjusted for comparable units and currency, increased by 7% year-on-year, primarily driven by sales in India. Overall, sales in South East Asia, Oceania, and India increased by 61% year-on-year for the entire year 2023, fueled by significant market share gains in India.
The RAN market is expected to contract in 2024 due to the decline in India following the record build-out in 2023 and cautious customer capex investments. Ericsson highlighted the need for additional network investments, considering the growing data traffic and the early stages of 5G build-out. While the company expressed confidence in a market recovery, the timing remains contingent on customer decisions.
