So, it’s a little tough to cover the news, compile the newsletter, and prep and chair a bunch of sessions about quantum-safe networks. So we’re a little short today. But we should probably take a look at these Ericsson figures, briefly, as delivered by outgoing chief Börje Ekholm in his final quarter before handing over to Per Narvinger. Ericsson’s margins are the standout – a 48.4% adjusted gross margin and a 13.1% adjusted EBITA margin. Which says something about cost control and operational discipline. Sales are still under pressure: SEK 52.7bn for revenue, down 6% from SEK 56.1bn a year ago, partly for currency impacts and a “one-off” IPR hit – but down 1% as organic growth anyway. Which tells the story everyone knows: that 5G sales, in all forms, are hard to come by.
There is some growth for the Swedish firm in cloud software and enterprise solutions; the drone sensing demo with AT&T yesterday, like its private-networks push, looks like another decent future gamble. But otherwise, the mobile industry is waiting on full-scale 5G SA, APIs, AI-RAN – and a far-off 6G upgrade cycle that cannot come fast enough. But the interesting thing, of course, is that AI is the opportunity and the problem, right now. Ericsson’s long-term thesis is that AI will create demand for more intelligent mobile access networks – some time after the upgrade work on fixed fiber backhaul and longhaul systems is done. But in the short term, the AI boom is creating supply-chain inflation, particularly around components such as memory and custom chips. Ericsson has warned that it expects to use internal measures and pricing actions to offset these pressures.
The challenge is that Ericsson’s growth narrative still depends on telcos completing a set of unfinished 5G SA upgrades, and making a proper leap on investments in automation and increasingly on autonomy – as the foundation for AI-driven services for the whole economy. Until they do, flat-lining in 5G looks more like a show of fighting spirit, and even of rude health. Which doesn’t much help the industry, of course, or its profile or its shareholders.
James Blackman
Executive Editor
RCR Wireless News
RCR Top Stories
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Floating DCs: Korean company HD KSOE and Schneider Electric have a deal to develop floating data centers, targeting offshore engineering solutions as interest grows in alternatives to land-constrained, energy-intensive facilities.
Real bottleneck: Dell’Oro says power infrastructure – not liquid cooling – is the defining constraint on AI data center expansion, while heat rejection, permitting delays, and grid access increasingly shape where future AI capacity gets built.
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Beyond the Headlines
IoT paradox: Wireless Logic’s acquisition of SIMETRY reinforces its position as IoT’s most aggressive consolidator. But while the market is tipped for merger-driven scale, inflated valuations and healthy growth may slow industry consolidation.
NTN trends: Mobile operators want more control over satellite connectivity and are taking steps to get it, according to a new report from GSMA Intelligence. The NTN market is growing, but most deployments remain in the testing phase.
Telco resets: Vodafone finds itself centre stage again as telco consolidation gathers pace, while industry efforts to open up RAN software and scale private 5G reveal how long structural change can take.
O-RAN latest: The OCUDU foundation is working on open RAN, and its first technical release is already out. The project has backing from Qualcomm, Ericsson, Nokia, Samsung, AT&T, Verizon, others.
Defense deal: NestAI and Nokia have introduced AI-powered 5G and sensing capabilities meant to keep military forces connected, coordinated, and aware even when enemies jam or destroy networks
What We're Reading
Ekholm’s last Q: Ericsson posted a resilient Q2 in Börje Ekholm’s final quarter as CEO, with SEK 52.7bn sales, 48.4% adjusted gross margin, and 13.1% margin. But rising costs linked to AI threaten future profitability, even as it bets on AI.
New Zayo chief: Zayo has tapped former Verizon exec Sampath as CEO, succeeding Steve Smith. Zayo is targeting AI infra growth, leveraging expanded fibre assets to serve hyperscale, cloud and enterprise demand.
Nokia in Taiwan: Nokia has extended a 5G deal with Taiwan Mobile to add AI automation, energy management, and resilience capabilities. The firm is positioning 5G as programmable AI infra to improve efficiency and create opportunities.
Defense posture: Lumen has expanded a deal with Palo Alto for managed detection, combining Black Lotus Labs with Cortex XSIAM. The deal reflects Lumen’s strategy to turn its fiber assets into high-value enterprise services.
Iridium ASIC: Iridium has launched its PNT ASIC so devices maintain positioning and timing when GNSS signals are disrupted. The satellite operator is extending its role as a resilience partner for critical infrastructure and telecom networks.
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