Wednesday, August 19, 2009

Svanberg assures on bank’s assistance for Sony Ericsson

The out-going chief executive officer at Ericsson, Mr. Carl-Henric Svanberg has assured that the Swedish vendor’s commitment to Sony Ericsson, its mobile handset deal with Sony would get support from banks.

Reuters reports that its loss-making handset joint venture with Japan’s Sony would receive support through an arrangement by Ericsson.

As said by the report, Ericsson has expressed its willingliness to arrange bank financing to support the venture rather than it rely on contributions from parent companies.

“The first thing you do as a company is not to run to your shareholders and ask for more money. The first thing you do is try to arrange normal financing,” Svanberg said, stressing that lending conditions have improved from six months ago.

He also said that Ericsson remained committed to providing financing for the JV if necessary and would not “leave them in the cold if they end up in that situation.”

Sony Ericsson’s share of the global handset market has sunk to around 5 per cent in recent times, but Svanberg said the unit remained an important part of Ericsson’s overall mobile strategy.

He declined to forecast when the loss-making unit would return to profitability, saying that there was no timeframe in place for when the unit would move back.

In another media chat, Svanberg said that mobile operators appear to have stopped cutting spending on network equipment, suggesting a recovery in the market was imminent.

“The whole world is suffering from decline that is bigger than anything we’ve seen... [but] it is not our impression that there is further cutting being made,” he said.

Svanberg will leave Ericsson to become chairman of UK energy giant BP in January.

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