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> Ericsson: No luck with Aust labs, but China's a chance
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zdnet.com.au
By Angus Kidman, ZDNet Australia
28 November 2003
Six months after closing down its Australian R&D operations, Ericsson admits there's not much chance it will be re-establishing any similar local facility in the near future.
"Never say never . . . but I think we have just been through a concentration process where we had our R&D sites in 80 locations and it has come down to less than 30,"
Håkan Eriksson, vice president and general manager for research and development at the telco equipment manufacturer, said at the company's regional strategy and technology summit in Beijing. "We are not really in an expansion phase right now." Eriksson added that efficiencies gained through not having to co-ordinate communications through multiple locations were also a major consideration in the shutdown.
Four hundred staff at Ericsson's Melbourne R&D centre lost their jobs in a gradual process of attrition that began in October last year and drew censure from several quarters, including then communications minister Senator Richard Alston.
Ironically, Australia might yet benefit from Ericsson's expansion into China -- a region which largely survived the R&D cuts across the globe. Ericsson still employs more than 500 people in R&D in China, and is expanding that sector at 25 per cent each year, according to Jan Malm, head of Ericsson China.
However, CEO Carl-Henric Svanberg has identified services provision as a major growth area for the company, and in that field the managed services model being provided by Ericsson for Hutchison's 3G service in Australia is being used as a model for the rest of the world. "We have not really had a very strong tradition in China for services," said Malm.
Ericsson recently reported its first profitable quarter after 33 months of red ink, but Svanberg doesn't believe the telecommunications sector has yet fully recovered from post-dotcom-slump. "We're going through the final phase of the dramatic correction from the optimistic nineties," said Svanberg, who took over the CEO role in April after a highly successful stint running a physical security firm.
Angus Kidman visited Beijing as a guest of Ericsson.
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Posted: 2003-11-28 02:53:45
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