At its capital markets day, Swedish kit vendor Ericsson said it's aiming for the lower end of its margin target amid a networking market that is unlikely to grow for the foreseeable future.

Amid continued awkwardness around its relationship with US authorities, Ericsson sought to focus on the positives during its annual strategy update. Much of the presentation addressed the rationale behind the acquisition of Vonage, which is Ericsson's biggest. The point of it is to transform Ericsson into a "platform company," but that transformation is going to take a while and is far from certain to deliver the hoped-for return.

Figure 1: Outside of China, the majority of RAN sites still need to be upgraded to 5G, Ericsson said.
(Source: Ericsson)

So the underlying message to investors and analysts seemed to be a plea for patience. Ericsson was keen to stress that the overall direction of travel is positive when it comes to key metrics such as profitability, but that future growth will rely largely on its diversification into non-telecoms enterprise markets. A big reason for that is that the mobile networks market, from which Ericsson currently derives the majority of its revenues, is expected to be flat for the next few years.

– This is an excerpt from a longer article on our sister site, Telecoms.com. Read the full story here.

— Scott Bicheno, Editorial Director, Telecoms.com