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Telefon AB LM Ericsson Q1 2010 Earnings Conference Call Transcript

Telefon AB LM Ericsson Q1 2010 Earnings Conference Call Transcript

Telefon AB LM Ericsson (ERIC)

Q1 2010 Earnings Call Transcript

April 23, 2010 8:00 am ET


Susan Anderson (ph)

Hans Vestberg – President and CEO

Jan Frykhammar – CFO

Johan Wibergh – Head of our Network Segments


Rod Hall – JP Morgan

Zahid Hassan (ph) – Citi

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Joan Gabardy (ph) – RBC Capital Markets

Kulbinder Garcha – Credit Suisse

Richard Kramer – Arete

Alexandre Peterc – Exane / BNP Paribas

Patrick Standaert – Morgan Stanley

Anil Krishan (ph) – UBS

Adnan Ahmed (ph)

James Faucette – Pacific Crest



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» Telefonaktiebolaget LM Ericsson Q1 2009 Earnings Call Transcript

Welcome to the Ericsson’s (Analysts) Media Conference call for the first quarter report. To view visual aids for this call please log onto


. (Operator Instructions)

As a reminder replay will be available one hour after today’s call. (Susan Anderson) will now open the call.

Susan Anderson

Thank you operator and hello everyone and welcome to our call today. With me here in Stockholm are Hans Vestberg, our President and CEO and Jan Frykhammar, our CFO and Johan Wibergh, Head of our Network segments. During the call today, we will be making forward-looking statements. These statements are based on our current expectations and certain planning assumptions which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today’s press release and discussed in this conference call. We encourage you to read about these risks and uncertainties in our earnings report as well as in our annual report. I have one comment to today’s report and that is of the acquired Nortel business was reported under the region other in Q409.

We will correct this during the afternoon and however I want you to know that all (photos) are correct. So it’s just a matter of difference between region. With that said, I would like to handover the call to Mr. Hans Vestberg.

Hans Vestberg

Hello everybody. I will go through again a little bit what I did this morning, because we know that we have a quite a lot of people coming onto this call that attend in the morning. But I will try to make it quite briefly. Starting with just what we announced yesterday, so we are all clear on that we made some change in our external reporting. Basically a combination of feedback that we got from investors, how we should we disclose, but also our ways of working internally.

The three that we have done is number one, we are now reporting 10 regions or actually its 11 regions, one region is other but its 10 geographical regions and that’s how we work internally as from the 1st of April when we changed orientation internal in Ericsson as well, so its going to be a clearer transparency of work internally as we report externally. The second one is that we have moved the network rollout business from segment networks and we have moved that into the new segments called Global Services, which then is a combinational professional services and the network rollout. And finally or the third one is that we have also off the discussions with investors changed to EBITA which we have now have replaced that we had before EBITDA, so we’re sort of taking away the depreciation there because that was sort of a feedback and that we have done as well.

Those are the changes in the report and we can also see that the report has touched is now on the table on the first slide, all in all, it should give a best visibility where we are going. As said we are done in both in transparency our work internally as we’ve changed as well as feedback from the market. Good, a couple of Q1 trends there starting with, we see that operators are still varying in their activities and that’s continuing this quarter.

We can say that the trends that we saw in the third quarter and the fourth quarter prevails that there are both macro economic has impact in certain regions but there is also a technology shift from 2G to 3G as well as general quarters in our markets. So I think that is prevailing. We see still that some of the growing markets like in Africa, parts of Asia, and even parts of Middle East are cautious on the level of quite low in terms of investment. Finally we have seen new in the quarter the increased level of discussions with operators regarding their business and now the data (voltage) coming, how they can contribute to a good customer experience when it comes to quality and efficiency.

And of course that is driven by the strong data growth and some of you might have recognized that during the CPIA released the press release where we basically we are following the traffic in the networks presented or communicated that now we have more traffic from the data users that are some plus 400 million in the world than all the voice subscribers which are 4.8 of the closing this quarter. So we definitely see that growth in data. A couple of events that are important that has happened of that quarter which I just want to highlight. The day before yesterday we announced that we acquired Nortel’s share in the joint venture to get to the LG addressing the Korean market.

And of course this is from us is an important thing because Korea is the third largest telecom market in Asia. Very advanced when it comes to technology services and applications and Ericsson has a very limited business in Korea today. This enable us to work with all the three major operators in the Korean market, both with the current portfolio but also of course seeing that the technologies that will come that we will be good represented on the LTE.

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