Ericsson signs massive USD8.3 billion deal with Verizon as its business faces China headwinds

Ericsson signs massive USD8.3 billion deal with Verizon as its business faces China headwinds

• By Staff Writer

Ericsson has signed a landmark multi-year agreement to provide its 5G solutions to accelerate the deployment of Verizon’s world-class 5G network in the United States.

Under this USD8.3 billion agreement, the biggest ever for the Swedish company in its 145-year history, Verizon will deploy Ericsson’s 5G MIMO C-band, low-band and millimeter wave (mmWave) solutions to enhance and expand Verizon’s 5G Ultra Wideband coverage, network performance and user experience.

Ericsson’s technology solutions, including Massive MIMO,  Spectrum Sharing, and Cloud RAN, are part of the high-performing Ericsson Radio System portfolio to support 5G services. Ericsson’s industry-leading software functionality provides end-users with the speed and performance they expect from 5G networks.

Niklas Heuveldop, President and Head of Ericsson North America, says: “This is a significant strategic partnership for both companies. What we’re most excited about is bringing the benefits of 5G to US consumers, enterprises, and the public sector. We’re looking forward to working with Verizon to leverage solutions like Cloud RAN and our Street Macro, adding depth and versatility to 5G network rollouts across the US.”

In 2020, Verizon was the first communications service provider to receive a commercial 5G mmWave Street Macro base station from Ericsson’s award-winning state-of-the-art smart factory in Lewisville, Texas.

Kyle Malady, Chief Technology Officer for Verizon, added: “With this new agreement, we will be able to continue driving innovation and widespread adoption of 5G. We are pleased to continue this work through our long-standing relationship with Ericsson.”

The deal comes at a very crucial time for Ericsson, which is facing headwinds in its China business because of political issues between Sweden and China.

Sweden banned rival Huawei over security concerns, and Ericsson is facing repercussions with China threatening similar action against the Scandinavian nation.

Ericsson’s second-quarter earnings, released recently, already showed the effects of the tension, as the company posted its first decline in quarterly revenue in at least three years. The group reported total sales of 54.9 billion Swedish kronor (USD6.3 billion), a 1% decline from 2020 levels and below market estimates of SK 57.3 billion. Sales in China dropped almost 50% to SK 2.5 billion.

In light of the developments in China, the Verizon deal becomes crucial for Ericsson and Carl Mellander, chief financial officer, told MarketWatch: “The single most important thing is the commitment that Verizon shows to us, and the trust — because it’s a five-year deal, and it’s very large.”

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