New Ericsson CEO will face fierce competition

Hans Vestberg, Ericsson's new CEO, will have to fight off Chinese companies and a bolstered Nokia Siemens venture.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Stephanie N. Mehta, assistant managing editor

hans_vestberg.03.jpg
Hans Vestberg, Ericsson's CEO, starting next year
Have you seen stimulus-funded construction projects in your neighborhood?
  • Yes
  • No
  • Don't know

NEW YORK (Fortune) -- It is no surprise that Hans Vestberg, who will become Telefon AB L.M. Ericsson's CEO next year, started off an interview about his new post by talking about the global financial crisis. Vestberg, after all, is the Swedish telecommunications gear maker's chief financial officer, and he's had a front-row seat for the worldwide economic malaise.

But Vestberg, who will replace Carl-Henric Svanberg (he's becoming BP's chairman), will face more challenges than the global economy, which may start to rebound as he takes office. A more persistent challenge for Ericsson (ERIC) may well be competition from rivals old and new.

Earlier this month Nokia Siemens, a joint venture of the two telecom giants, agreed to acquire key wireless assets from Canada's Nortel. The purchase will give Nokia Siemens a stronger foothold in the North American market, where Ericsson, the world's largest supplier of wireless telecom equipment, has been a major player.

The Nortel deal "gives Nokia Siemens something else in their arsenal," says Jane Zweig, CEO of the Shosteck Group, a telecommunications consulting group. "And I don't think Ericsson really factored Nokia Siemens in."

Ericsson also faces stiff competition from a pair of Chinese equipment makers, Huawei and ZTE.

Huawei and ZTE have been taking share from established equipment makers such as Ericsson, Alcatel-Lucent (ALU) and others for years. Initially customers had concerns about the quality of the Chinese companies' products. But today, phone operators say, the products from Huawei and ZTE are comparable to those made by longtime gear providers.

Vestberg, 44, says he believes Ericsson has its own set of tools in its arsenal. "Of course, we will always face competition whether they are French American or Chinese," he says. "I think our competitive advantage is our technology leadership. We will compete by having the best technology and the most robust technology."

He also points to Ericsson's strong presence in the services business. As telecom networks have become more complex, a growing number of operators are turning to Ericsson (and others) to basically run their systems and help them migrate from one generation of technology to the next.

Vestberg appears to have the energy for the job. Since joining the company in 1991 he has worked for Ericsson around the world in markets such as China, Chile and Brazil. He was president of Ericsson in Mexico and served as CFO for Ericsson in North America.

Executives and analysts who've met Vestberg describe him as personable and relationship oriented. And because he worked so closely with Svanberg, they say, investors are not likely to see many radical changes in Ericsson's strategy. To top of page

Company Price Change % Change
General Electric Co 9.90 0.01 0.15%
Advanced Micro Devic... 27.15 0.47 1.76%
Micron Technology In... 35.60 0.98 2.83%
Bank of America Corp... 28.70 0.30 1.07%
Kohls Corp 57.46 -5.45 -8.66%
Data as of 1:09pm ET
Index Last Change % Change
Dow 25,853.80 173.90 0.68%
Nasdaq 7,790.93 88.56 1.15%
S&P 500 2,865.62 25.39 0.89%
Treasuries 2.43 0.01 0.50%
Data as of 1:24pm ET
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.