Ericsson Has Reportedly Scored A New 5G Contract From Bharti Airtel, Here's What We Know

Ericsson's new contracts are anticipated to significantly enhance its revenue in 2025, especially after experiencing a notable decline in contract volumes from India during the first half of this year

This rising demand in the Indian market helped offset a decline in revenue from Ericsson's largest market, the United States.

Source : Unsplash/Baatcheet Films

Swedish telecommunications equipment manufacturer Ericsson has secured a substantial multi-billion dollar contract to supply 5G equipment to Bharti Airtel in India, according to two sources with knowledge of the situation, reported Reuters. This new agreement follows Ericsson’s recent acquisition of a portion of a $3.6 billion (approximately Rs. 30,259 crore) contract from last month, which was awarded for providing 5G equipment to Vodafone Idea. In that instance, Ericsson partnered with Nokia and Samsung to fulfill the contract. 

These new contracts are anticipated to significantly enhance Ericsson's revenue in the upcoming year, especially after experiencing a notable decline in contract volumes from India during the first half of this year. In fact, sales in regions such as Southeast Asia, Oceania, and India plummeted by 44 per cent in the second quarter. Ericsson is set to release its third-quarter financial results on Tuesday, and much of the deployment related to these contracts is expected to take place next year, as noted by one of the sources. 

Post the publication of the Reuters story, shares in Ericsson rose by around 1.8 per cent.

5G Boom In India

In 2023, the demand for 5G services in India surged dramatically, with sales from the region increasing by as much as fivefold. This remarkable growth was primarily driven by major telecommunications players Airtel and Jio, the latter being the telecom arm of the Indian conglomerate Reliance Industries, as they began to expand their 5G offerings significantly. This rising demand in the Indian market helped offset a decline in revenue from Ericsson's largest market, the United States, where telecom operators have been scaling back their expenditures.

According to research firm Dell'Oro, global revenue in the telecom equipment sector experienced a substantial year-over-year decline of 16 percent in the second quarter, marking the fourth consecutive quarter of double-digit decreases. This ongoing trend reflects the challenges faced by the industry, highlighting the contrasting dynamics of growth in emerging markets like India against the backdrop of slower spending in more established markets.