Ericsson sees equipment market CAGR of 3-5% in 2012-15

Ericsson expects the total network equipment market will show a compound annual growth rate (CAGR) of 3-5 percent in 2012-2015. In Ericsson's key market segments - radio, IP and transport, core - the CAGR is expected to be slightly higher, at 4-6 percent. This is based on estimated average annual growth of 204 percent in radio equipment, 6-8 percent in IP and transport and 0-2 percent in core networks. Over the same period, Ericsson expects the market for telecom services to show a CAGR of 5-7 percent. The market for support solutions is forecast to show a CAGR of 9-11 percent, including a CAGR of 12-14 percent for the media market, and the market for OSS/BSS software and services is expected to show a CAGR of 5-7 percent. 

The forecasts were issued at the company's capital markets day, where Ericsson highlighted its leading market position in four out of its six businesses. In mobile equipment, Ericsson increased its market share to 38 percent in 2011. In the three key equipment market segments, radio, IP and transport, and core, the company has an aggregated market share of 27 percent, and in the fragmented telecom services market Ericsson increased its market share in 2011 from 11 to 12 percent. The company also has a leading market position in OSS/BSS. 

CEO Hans Vestberg will elaborate the company's strategies for profitable growth, with revenue growth expected in the key areas of mobile broadband, managed services and OSS/BSS. He will also describe how the company is expanding beyond its core business in order to capture value from adjacent industries, while operators continue to be the major customer segment. Vestberg said that while Ericsson expects the focus on coverage to continue in the near term in the industry, over the longer term investments will shift towards optimizing network performance, giving Ericsson more recurring revenue from software and services. 

CFO Jan Frykhammar will discuss how Ericsson intends to improve capital efficiency. The working capital targets for the company will remain unchanged with DSO of less than 90 days, payable days of more than 60 days and inventory turnover of less than 65 days. He will also outline ongoing cost-efficiency efforts and how the company expects to achieve the compound operating income growth of 5-15 percent required in the Executive Performance Stock Plan. 

Other executives will give presentations on business elements such as CDMA, OSS/BSS, ICT services and future technologies.