Pressure mounting on Ericsson’s new boss

Börje Ekholm’s honeymoon is over. Ericsson’s new CEO has remained tight-lipped about his plans for the company, something that has surprised analysts. Several are now hoping that Börje Ekholm will present a concrete decision about the future direction of the company at Wednesday’s AGM.

The telecoms giant is facing several challenges. Ericsson is losing market share, mainly to the Chinese company Huawei, and an expensive race is underway between the world’s telecoms giants over new 5G technology. Furthermore there are unanswered questions about whether parts or the whole of Ericsson are up for sale. At the turn of the year Ericsson restructured its business areas and now consists of Networks, IT & Cloud and Media. There has been speculation that the latter two will be sold or hived off.

SvD writes that its sources have had no signals from Ericsson, which most likely means that no decisions have yet been made about the future. Daniel Djurberg, telecoms analyst from Handelsbanken, says, “My guess is that it will come before midsummer. This uncertainty is not great with as strong a competitor as Huawei. I think it has already affected the stock price.”

Criticism of Ekholm’s USA residency

The appointment of Börje Ekholm as CEO for Ericsson last Wednesday was one of the more sensational pieces of news on the Stockholm stock market for several years. An initial gain in share price was later cancelled out due to Börje Ekholm’s decision to remain in the USA and the fact that he did not distance himself from Ericsson’s recent strategy.

DI reports that not all board members realised Ekholm would not move to Sweden, which creates problems for the board that fired Bina Chauraisa, HR director in October, because she lived in the USA and Ericsson needed someone stationed in Stockholm. Furthermore shareholders have expressed their concern about how it will work and how much time will be wasted on travel.

Furthermore in an interview with SvD chair of Ericsson’s board Leif Johansson admits that he and the board ought to have noticed Ericsson’s decline earlier. “If we had foreseen the decline that came heavily at the start of 2016 then we would have acted differently,” he says.