STOCKHOLM, July 24 (Reuters) - Top telecom networks maker Ericsson (ERICb.ST) has no plans to exit its loss-making joint ventures ST-Ericsson and Sony Ericsson, its top executive told Reuters on Friday.
Asked if it was considering leaving the joint ventures, Chief Executive Carl-Henric Svanberg said: “No. That is logical (that they make losses) with the position they have and the way the handset market is looking right now.”
“Powerful efforts are being made (within the companies), and we don’t expect any further weakening of the handset market.”
ST-Ericsson, the second-biggest maker of wireless chips after Qualcomm (QCOM.O) and just ahead of Texas Instruments TXN.N, is a joint venture with Franco-Italian chipmaker STMicroelectronics (STM.PA).
Mobile phone maker Sony Ericsson, which has rapidly lost market shares in recent quarters, is a venture with Japan’s Sony (6758.T).
Svanberg also said Ericsson was currently not planning any further cost-cutting programmes.
“No, if nothing unexpected happens, I expect it to be enough. It is a very powerful programme that we have, more powerful than many other in this business.”
Ericsson earlier on Friday said the economic downturn was now taking a bigger toll on its main market, a shift that took the gloss off second-quarter results and sent its shares lower.
Reporting by Helena Soderpalm