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Ericsson halts business in RussiaEricsson halts business in Russia

Swedish vendor to make SEK0.9 billion provision over move to suspend business indefinitely.

Anne Morris

April 11, 2022

3 Min Read
Ericsson halts business in Russia

Ericsson has announced plans to suspend business indefinitely in Russia following that country's invasion of Ukraine, and said it will record an SEK0.9 billion (US$95 million) provision in the first quarter of 2022 for impairment of assets and other exceptional costs.

In a statement, Ericsson said it is engaging with customers and partners "regarding the indefinite suspension of the affected business."

Figure 1: Swedish vendor Ericsson is to make provisions of SEK0.9 billion over the move to suspend business in Russia indefinitely. (Source: Ericsson) Swedish vendor Ericsson is to make provisions of SEK0.9 billion over the move to suspend business in Russia indefinitely.
(Source: Ericsson)

"The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave," the vendor added.

Heading for the door

The Swedish vendor has therefore become the latest company to take action in light of recent events and international sanctions imposed on Russia.

Intel said last week that it has suspended all business operations in Russia. In March, Apple announced it had halted sales there, while Ford, Exxon, Volkswagen, Dell and Nike are among other companies that have also suspended operations or sales in the country.

Ericsson rival Nokia said in March that it had suspended deliveries to Russia for the time being.

However, the Finnish vendor was later forced to respond to a New York Times article that made claims regarding Nokia's role in Russia's lawful intercept system, or SORM. Nokia has said that it does not manufacture, install or service SORM equipment or systems. "Any suggestions that we do, are incorrect," the vendor stated.

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As Light Reading noted in its report about Nokia and SORM, telecom equipment suppliers may well suspend deliveries and halt operations, but their technology is still being used throughout Russia's telecoms networks.

Like most vendors, Ericsson itself has engaged with all of Russia's big telecom players in recent years.

For example, in October 2021 it entered into a strategic partnership with MTS to develop 5G private mobile networks, and has collaborated with the operator on testing and deploying 5G technology.

The vendor has also announced various contracts with MegaFon and VEON, although relations with the latter presumably became more strained after a rather large snafu over a contract to supply business support systems (BSS).

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— Anne Morris, contributing editor, special to Light Reading

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About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

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