Ericsson’s India Q3 revenues vault 56% to take overall revenues to $7.9 bn

Swedish telecom gear maker Ericsson has reported a 9 per cent increase in sales in the July-September quarter at SEK 57.6 billion ($7.9 billion or about Rs48,354 crore), on the back of rising revenues from emerging markets like India, West Asia, China and Russia.

The company's revenues stood at SEK 53 billion ($7.2 billion) in the corresponding quarter of the previous year.

Ericsson saw its India revenues rise the most with sales zooming 56 per cent to SEK 2 billion ($0.27 billion or Rs1,678 crore) - the highest growth across all regions where Ericsson has operations. Ericsson's India sales revenue grew 22 per cent sequentially.

According to Vestberg, the sharp year-on-year revenue growth is also a reflection of "improving investment climate in India".

Of the SEK 2 billion India sales revenue, SEK 1.1 billion came from networks, SEK 0.7 billion from global services and 0.2 billion from support solutions in the third quarter.

Since the end of last year, India sales "has recovered, mainly driven by an increase in operator capex spending in response to greater data uptake," the company said, adding, "on-year growth was propelled by its operations support systems (OSS), business support systems (BSS) and TV & Media" verticals.

The OSS business comprises software applications that support a telco's back-office activities and maintain customer services while business support systems (BSS) are software apps that assist activities involving customer interface such as billing, customer relationship management to call centre automation.

"India, with its very young population, is at the heart of the transformation that Ericsson plans to ring in through mobility," the company's India region head Chris Houghton had recently said.

The Swedish mobile networks gear maker is also betting big on the country's Digital India initiative that aims to deliver government services to the common man primarily through mobile phone applications.

"We believe mobile broadband will be the platform on which the Digital India vision can be delivered as it has the potential to help bring about inclusive growth in the country by extending education, healthcare and financial inclusion to rural areas and lower income groups," Houghton had recently said.

Middle East revenues increased 38 per cent to SEK 6 billion while sales in North East Asia rose 16 per cent to SEK 7 billion.

"The sales growth year-on-year was mainly driven by the West Asia, China, India and Russia, but was partly offset by lower sales in North America," Ericsson president and CEO Hans Vestberg said in a statement.

"We are executing on 4G/LTE contracts in Mainland China and Taiwan and improving sales in Japan. Furthermore, the investment climate in India continues to improve," he said.

On profitability, Vestberg said there was stable improvement across all segments. This was primarily driven by favourable business mix, higher IPR revenues as well as efficiency enhancements, he added.

However, Ericsson's net income declined 19 per cent to SEK 2.6 billion in the July-September 2014 quarter from SEK 3 billion in the corresponding quarter of the previous year mainly due to falling revenues in North America.