Wednesday, 16 January 2019

Ericsson takes $687m hit to restructure its BSS division

By Chris Kelly, Total Telecom
Thursday 10 January 19

The company will focus on 'simplifying and stabilising' its business support Systems business unit, in 2019

Swedish tech manufacturer Ericsson will take $687 million hit as it looks to reshape its Business Support Systems (BSS) unit, according to a company release.  Ericsson's was in the process of trying to scale up its BSS unit…

Swedish tech manufacturer Ericsson will take $687 million hit as it looks to reshape its Business Support Systems (BSS) unit, according to a company release. 

Ericsson's was in the process of trying to scale up its BSS unit, which provides billing services to enterprise customers. However, the company said that a lack of appetite for the products had led the company to return to focussing on its core products. 

"The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialized. Delays in product and feature development has also made the full-stack Revenue Manager less competitive. R&D resources in BSS have been focused on full-stack Revenue Manager, causing further delays in product releases of the established platform. In addition, certain complex transformation projects experienced delays and cost overruns," Ericsson said in a statement to the press. 

Ericsson said that it would book the $687 million loss in its fourth quarter 2018 financial reporting.

The decision will be a major source of irritation to the company's shareholders, who had seen the company's cost saving initiatives begin to bear fruit in recent months.  Ericsson's share price took a 4.5 per cent hit on Thursday, as the market reacted to the news. 

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