Ericsson, the world’s largest telecommunications equipment company, has simplified its organisational structure into three units to reflect convergence in the communications industry.
Effective January 1, the three units will be Networks, Global Services and Multimedia. The company’s shares nudged up 1.22 per cent higher in early trading in Stockholm.
Carl-Henric Svanberg, chief executive, said the move would allow the company to develop a “market defining role in the integration of communications and media”.
A spokesman for the company said the move reflected forecasts for substantial future growth in mobile data traffic. Mobile data traffic includes mobile internet, mobile office, TV streaming, video telephony and music and other downloads.
Mobile data is forecast to surpass voice data by 2010. According to figures disclosed in the firm’s interim report for the second quarter of the year, voice traffic is forecast to grow from about 300,000 terabytes a year to about 800,000 by 2011.
In contrast, mobile data traffic is expected to grow from the same level in 2004 to just under 3,000,000 terabytes in 2011.
“We will leverage our position in mobile networks, services and transmission and expand our leadership in next generation converging internet protocol networks with a focus on multimedia applications and services,” the company said in a statement.
In July, the company’s net profit slipped for a second successive quarter, but expressed confidence in a stronger second half performance.
The Swedish company said quarterly net profit dropped 2 per cent from SKr5.8bn ($800m) last year to SKr5.7bn, but was up 25 per cent compared with the first quarter of 2006. The decline was attributable partly to last year’s acquisition of Marconi, the UK equipment manufacturer, which contributed a SKr200m operating loss in the quarter.