Ericsson Signs a 5G Deal Worth $8.3 Billion with Verizon

Ericsson unveiled on Friday a contract worth $8.3 billion to provide US operator Verizon with equipment for its 5G network. This deal is the Swedish vendor's biggest single contract ever.

Ericsson Signs Mega Deal with Verizon

In the United States, the group "signed another five-year contract, this one amounting to $8.3 billion, with a leading customer. This is the single largest deal in the history of Ericsson," the earnings statement said.

Since Sweden has banned Chinese telecom vendor, Ericsson, a Swedish firm, has noted loss in the Chinese market. However, the vendor did say in its report that its net profit had jumped by 51%.

CEO Borje Ekholm said, "it is prudent to forecast a materially lower market share in Mainland China for Networks and Digital Services as the earlier decision to exclude Chinese vendors from the Swedish 5G networks might influence market share awards".

After the UK, Sweden became the second country in Europe to explicitly ban the Chinese groups Huawei and ZTE.

Ericsson is battling Huawei and Nokia, among others, for 5G contracts. Furthermore, China and the US are huge markets for their equipment. In June, a Swedish court struck down an appeal from Huawei against a ban in the country on security grounds. To that regard, Ericsson was bracing for retaliation from China already.

Meanwhile, the company posted a net profit of 3.9 billion kronor (381 million euros, $450 million) for the second quarter of 2021. This represents a jump of 51% from the same period in 2020 that was marked by the COVID-19 pandemic.

Ericsson's sales slipped however by 1% to 54.9 billion kronor owing notably to a drop of 2.5 billion kronor in China from the same period a year earlier.