STOCKHOLM --

CEO COMMENTS

"The evolution to mobile broadband is accelerating. This new powerful HSPA technology dramatically improves the consumer experience of new multimedia services such as mobile office, music and mobile TV," says Carl-Henric Svanberg, President and CEO of Ericsson. "We have a clear lead and are rolling out HSPA networks in four continents. We have also established a leadership position in fixed and mobile softswitch. This new software-based switching technology offers considerably lower upfront operator investments and an evolution path toward converged networks.

Our good organic sales growth continues, in this quarter primarily driven by services. Through our early lead in services we have gained a strong position with an exciting growth potential. All areas within services are growing, especially managed services and hosting, as a consequence of operators' need for focus on business development and total cost of ownership.

The strategic move to acquire Marconi has been well received by our customers as they plan for convergence and development toward next-generation IP networks. Our position in the growing broadband and transmission segments has also been significantly strengthened. The integration process is well underway and business development has been better than expected. We have postponed the timings of certain actions to safeguard the increased orders and delivery commitments. As a consequence, the targeted cost savings will be realized slightly later than originally planned.

Our strong market position and technology leadership provide us with opportunities to organically grow our business further. Such opportunities often include certain start up costs and may therefore be less profitable short-term but are of obvious long-term value," concludes Carl-Henric Svanberg.

Ericsson AB (Nasdaq: ERIC)