Swedish telecoms equipment maker Ericsson is taking another huge writedown, this time of nearly US$1.8 billion worth of assets, the company said on Tuesday.
The move is the latest in a series of such setbacks for the beleaguered firm, as the Wall Street Journal reports, which is struggling to keep up with Chinese competitor Huawei.
“We’re not going to beat [Huawei] on costs, to be honest. There’s no chance. They have both scale and lower production costs,” Ericsson Chief Executive Börje Ekholm was quoted as saying in a November interview. “We need to beat them on innovation.”
Huawei is now the world’s largest telecoms equipment provider, despite being effectively shut out of the US market. After 2012 congressional report raised concerns of Huawei’s involvement in state-sponsored spying, US lawmakers have kept up pressure on American service providers to steer clear of the Chinese giant. AT&T was forced earlier this month to scrap a plan to sell its customers Huawei handsets, and lawmakers are reportedly still urging the firm to cut all remaining commercial ties.
Ericsson hopes to benefit from Huawei’s pariah status in the US as mobile carriers gear up to spend on 5G upgrades.