Ericsson boss is hopeful battered telecom
market will pick up speed

Copyright 2002 Toronto Star Newspapers, Ltd.
The Hamilton Spectator...08/14/2002
From LexisNexis

Karl Ritter
From CED Broadband Direct, August 14, 2002

The chief executive of wireless equipment maker LM Ericsson said yesterday that he expects the recession in the telecommunications market to flatten out next year, but added there were no clear signs of a turnaround.

Kicking off a 10-country tour to present the Swedish company's $3.2 billion (30 billion kroner) share-rights issue, Kurt Hellstroem said spending by telecommunications carriers cannot fall much more.

"We're not alone in thinking that this market will come back again," Hellstroem said. "Somewhere there is a bottom and we're close to it."

Ericsson shares have fallen 95 per cent on the Stockholm Stock Exchange since 2000 as operators cut spending due to the slow introduction of third-generation technology, which offers transmission speeds at nearly 40 times greater than existing standards and access to Internet services, video and e-mail.

But spending by network operators "cannot fall that much more," Hellstroem said.

"Then one would have to be seeing a catastrophic situation. But customers won't be spending zero. They will invest, we just don't know how much."

Ericsson said downgrades in its credit rating this year had left it in a more vulnerable position.

This summer, both Moody's Investors Service and Standard & Poor's lowered Ericsson's credit rating to junk status.