Ericsson AB Chief Executive Officer Hans Vestberg said he is targeting a $200 billion services market that's still mostly untapped to boost sales growth at the world's largest mobile-phone network maker. Two-thirds of the global market to help phone companies deploy and manage their infrastructure is still handled by the carriers themselves, presenting an opportunity for Ericsson, Vestberg, 44, said today in an interview at Bloomberg's headquarters in New York.
Ericsson seeks growth areas after profit declined for three straight years amid price competition and spending cuts by cash-strapped customers. Services, which include installation, network management and consulting, account for about 40 per cent of Ericsson's sales, Vestberg said. Ericsson plans to win over carriers by showing them where they can cut costs, he said.
"You can gain from that two-thirds," said Vestberg. "If you do perform well in the services, they see efficiencies gained." Ericsson, based in Stockholm, won a seven-year contract last year, worth as much as $5 billion, to manage Sprint Nextel Corp's network. In January, Ericsson predicted services revenue will grow at a 10 per cent to 12 per cent pace annually. Vestberg, who has been at Ericsson for nearly two decades, succeeded Carl-Henric Svanberg as CEO in January.
