April 22, 2009 / 1:20 PM / 9 years ago

UPDATE 1-Ericsson could put cash in Sony Ericsson if needed

* Ericsson says could put cash in Sony Ericsson if needed

* No comment on developments in equipment market in Q1

(Adds background, comment)

STOCKHOLM, April 22 (Reuters) - Ericsson (ERICb.ST), the world’s biggest mobile telecom equipment maker, said on Wednesday it was ready to inject money into mobile phone joint venture Sony Ericsson if needed.

Sony Ericsson, the world’s number 4 handset maker, reported a pretax loss of 370 million euros ($478.2 million) in the first quarter and repeated it saw the mobile phone market contracting at least 10 percent this year.

“In the situation they are in today it is a natural measure to take that we plan for this so that we have the readiness if it were necessary,” Chief Executive Carl-Henric Svanberg told journalists before the company’s annual general meeting.

“Then we will consider things depending on how the operations (Sony Ericsson) develop.”

Sony Ericsson, a joint venture between Ericsson and Japan’s Sony Corp (6758.T) plans to cut 2,000 jobs, around one-fifth of its workforce this year.

Svanberg said that Sony Ericsson was important to Ericsson because it allowed the company to understand what the end users of its products want, allowing it to create end-to-end telecoms solutions.

Svanberg declined to comment on further developments until Ericsson reports its first-quarter results on April 30.

He said Ericsson was not particularly worried by a trend toward network sharing by operators in Europe.

“We are not impacted particularly by this,” he said.

Telecoms markets are relatively well consolidated in the United States, Japan, and China, but Europe is still fragmented, Svanberg said.

He said the biggest costs associated with network building were sites, antennae, cables, batteries for example.

“On the other hand.. you need twice as much radio capacity in a shared net as you would in each of two separate networks.”

Sweden’s Tele2 (TEL2b.ST) and Norway’s Telenor (TEL.OL) said this month they would build a joint fourth-generation network in Sweden in a bid to cut costs. ($1=.7738 euros) (Editing by Mike Nesbit)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below