Ericsson Corp. remains upbeat on Asia Pacific market

Ericsson Corp. remains upbeat on Asia Pacific market

The Jakarta Post, Shanghai, China

The Swedish-based telecommunications equipment maker Ericsson
Corp. remains optimistic that the current weak market faced by
the industry would be short-lived, especially when emerging
markets such as Asia Pacific countries continue to show signs of
improvement.

President of Ericsson Asia Pacific Ltd. Ragnar Back said in a
recent seminar here that the Asia Pacific market still managed to
grow despite a slowdown in the telecommunications industry
worldwide.

"The whole telecommunications sector is having problems, but
the emerging markets managed to make an exception. Look at India,
China, Indonesia and so on. They're progressing very good," Back
told reporters in Shanghai, adding that the company's market
share in India's booming market had increased to 40 percent.

Such progress, Back added, was made possible due primarily to
the fact that Asia still has a relatively low penetration rate in
terms of infrastructure, compared to other established markets in
the world, such as the U.S. and Europe.

Ericsson has been known as one of the world's leading wireless
equipment providers, but the company, along with other firms in
the telecommunications industry, was badly hit by the current
unfavorable conditions in the global economy, which has been
experiencing a slowdown in the past year.

The situation forced the company to suffer its first annual
loss ever last year of 21.3 billion krona (around US$2.3
billion). As of the first semester of this year, it also recorded
a loss of around $900 million.

The situation has been so bad that the company has even begun
a restructuring package that will bring total employment below
60,000 by 2003, from 107,000 last year. It said its cost-cutting
actions were necessary to enable it to return to profit next
year.

In Asia Pacific however, Ericsson indeed has a strong market
position, with the company's net sales in the region in the first
half of the year reaching more than $2 billion, which accounts
for almost 30 percent of its global sales.

China and Japan are currently among the company's top 10
markets in terms of sales and orders, with China ranked as the
second largest market after the U.S. In China, over 50 percent of
mobile subscribers are connected through operators whose
equipment networks have been supplied by Ericsson.

In Indonesia, Ericsson supplies communications networks to all
of the four national-level mobile phone operators -- namely
Telkomsel, Satelindo, Excelcomindo Pratama and Indosat Multi
Media Mobile (IM3) -- as a result of which around 8 million
mobile phone subscribers in the country are connected to each
other.

"In the region, we're definitely well-positioned. We are now
the number one provider with over 30 percent of the market share
in mobile communications infrastructure. And we intend to stay
that way," Back said.

He added that things would be even better now that the economy
was heading toward recovery. As of June, there were more than 300
million mobile subscribers in Asia Pacific countries.

Ericsson is present in virtually all Asia Pacific countries,
with its regional head office being in Hong Kong, and 11 market
units located in Australia, China, India, Indonesia, Japan,
Malaysia, Singapore, South Korea, Taiwan, Thailand and Vietnam.

According to Back, a strong grip in the Asia Pacific market
would prove crucial as the region's mobile phone subscriber
growth has been and would remain the fastest growing in the
world.

It is expected that mobile phone subscribers in Asia alone
will account for some 50 percent of the global market, which is
projected to reach 1.8 billion subscribers by 2007.

Ericsson is shaping the future of Mobile and Broadband
Internet communications through its continuous technology
leadership.

Providing innovative solutions in more than 140 countries,
Ericsson is helping to create the most powerful communications
companies in the world.