Ericsson in talks to merge Spanish fibre arm in bid to expand margins
Madrid/London — Telecom equipment maker Ericsson is in talks to merge its Spanish fibre services arm, Abentel, with a local firm. People familiar with the plans of new CEO Borje Ekholm say he is scouting for more merger deals to cut costs and rebuild profit. Ekholm is under pressure by activist investor Cevian to accelerate cost cutting after Ericsson’s three consecutive quarters in the red, which have pushed its share price down 15% since January. The Swedish company is concentrating on reducing its exposure to maintenance and roll-out services, which require relatively highly paid staff. Abentel, which provides fibre-related services, was bought by Ericsson just 15 months ago. Spanish technology engineering services provider Dominion said it was in preliminary merger talks. Network roll-out and maintenance services are labour-intensive, low-margin businesses that have traditionally been outsourced to companies such as Ericsson, Nokia and Huawei. Ericsson is reviewing whether to se...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.