The Swedish telecom equipment maker Ericsson will finalize its Russia exit and cut staff this year, signaling further problems for Russian mobile operators’ upkeep of network coverage, the Kommersant business daily reported Monday.
Ericsson’s headquarters in Stockholm had informed its Russian unit on Aug. 22 that it will shut down and employees will be fired by the end of 2022, Kommersant reported, citing unnamed telecom industry sources. Ericsson employs 565 people in Russia, according to corporate data.
The company vowed financial and social support to outgoing staff in comments to the publication, and said it will complete the phaseout in the coming months “as it fulfills its obligations to customers,” according to Kommersant.
At least two top Russian mobile operators, MTS and Tele2, had major contracts with Ericsson prior to Russia’s invasion of Ukraine. Corporate data estimates Ericsson’s share of the Russian telecom equipment market at 20%.
Russian mobile operators now face shortages of equipment for Ericsson’s base stations, which are no longer available under warranty, and discontinued tech support for Ericsson’s continuously updated software, Kommersant said, citing Russia’s state-owned defense and technology conglomerate Rostec.
Experts told the publication that Ericsson could either create a separate legal entity for tech support, or Russian mobile operators could hire its outgoing staff to maintain aging equipment.
Ericsson suspended Russian business and put employees on paid leave in April over Russia’s invasion of Ukraine. Its Finnish rival Nokia pulled out of the Russian market the same month, while Chinese telecom giant Huawei temporarily suspended new orders and furloughed Russian staff in fear of secondary sanctions.
The three companies account for nearly three-quarters of the global base station market.