Ericsson eyes lucrative Asian market

Ericsson eyes lucrative Asian market

SINGAPORE (Reuter): Swedish telecommunications group Ericsson expects good growth of its phone systems and mobile handphones in Asia over the next few years, senior vice president for Asia Pacific Bo Landin said yesterday.

"We look upon the Asian markets as the fastest growing markets with a very high potential today," HongKong-based Landin told Reuters in a telephone interview.

He said Ericsson had a presence in nearly all countries in Asia, including China, and expected growth both in volume and market share.

Asia accounted for about 23-24 percent of Ericsson's total turnover in 1996, an increase of some three to four percentage points over the previous year, he said.

Landin declined to forecast growth rates for this year.

Ericsson would focus on expansion in the region by introducing more competent transfer technology, manufacturing and expertise in general, Landin said.

China, considered a major growth market, would be tapped for its manufacturing potential while efforts were also being made to push into the lucrative Japanese market.

"I foresee that production will be further increased, enhanced and that we will also have more development of products in Asia," Landin added.

In China, Ericsson has plants in Beijing, Nanjing, Shanghai and Guangzhou, which produce handsets, switching equipment and other telecommunication components.

It also has manufacturing facilities in the Malaysian capital, Kuala Lumpur, and in Bangkok, Thailand.

Meanwhile, after an earlier decision to stay out of Japan, Ericsson has decided now to woo Japanese consumers because of the dramatic rate of growth in the cellular market.

He said Ericsson's role as a system supplier of mobile phones in Japan triggered the interest to also provide handsets.

"The Japanese market is the fastest growing cellular market today with roughly one million new subscribers every month."

Asked about the impact of deregulation in Asia's booming markets, most notably in Singapore where the cellular market was opened up on April 1, Landin said competition would fuel growth.

"In most countries where deregulation has taken place earlier, markets have automatically grown because of competition introduced between the operators," he said, adding that the same could be expected in Singapore.

"We see this as an opportunity to increase our sales in volume.....and in relative terms," he said.

Ericsson's latest figures show it has a market share of more than 60 percent in Singapore's digital mobile phone market.

"It is probably the highest single market share we have in any Asian country today," Landin said.

Landin estimates the company has a share of about 15-20 percent of the market worldwide.

A larger portion of Ericsson's business is in fixed networks, such as switching and transmission solutions for enterprises and data communication, and in mobile phone systems.