Telefonaktiebolaget LM Ericsson (publ)
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions to communications service providers, enterprises, and the public sector in the Americas, Europe, the Middle East, Africa, Northeast Asia, Southeast Asia, Oceania, and India. It operates through Networks; Cloud Software and Services; Enterprise; and Other segments. The Networks segment offers hardware, software, and service offerings for intelligent, reliable and flexible 5G networks. This segment also provides energy-efficient RAN with an AI-native software architecture deployable on Ericsson silicon and third-party CPUs/GPUs; transport networks; and active/ passive antennas, as well as deployment and lifecycle management services. The Cloud Software and Services segment provides core networks, network management, business and operations support systems, and network operations delivered as managed services, including secure data and voice connectivity, service monetization and orchestration tools, and network management services. The Enterprise segment offers intelligent networking and advanced communications software solutions comprising global communications platform, wireless wide area networks (WWAN), and private 5G networks. The Other segment includes RedBee Media that prepares and distributes live and on-demand video services for broadcasters, sports leagues, and communications service providers. The company has a strategic collaboration with T-Mobile US, Inc for the development of AI-native Scheduler with Link Adaptation software. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
What does it do?
Ericsson is a Swedish company that builds the invisible infrastructure making your phone calls and mobile internet work. When a carrier like AT&T or Verizon says they're 'upgrading to 5G,' they're often buying antennas, software, and equipment from Ericsson to do it. Think of Ericsson as the construction company that builds the roads, while your phone carrier is the one charging you tolls to drive on them. They operate in over 180 countries, making them one of the most essential — yet least visible — companies in global tech.
5G is still being rolled out globally, and Ericsson is one of only three companies in the world (alongside Nokia and Huawei) that can supply the full network equipment needed to build it. With Western governments actively pushing carriers to rip out Huawei equipment over security concerns, Ericsson stands to capture a significant share of that replacement spending. The company is also pivoting toward software and enterprise services, which could make its revenues more predictable and less dependent on lumpy, one-time hardware deals.
How does it make money?
Ericsson makes money in three main ways. Its largest segment, Networks, sells the physical and software components — radios, antennas, and 5G hardware — that carriers install. Cloud Software and Services sells ongoing software licenses and managed services to those same carriers, generating more recurring revenue. Its Enterprise segment is newer and sells private 5G networks directly to businesses like factories or ports that want their own dedicated wireless infrastructure. Revenue came in at roughly $23.7B for the latest annual period (the $236.7B figure appears to be in Swedish Krona, translating to approximately $22-24B USD), down from the prior year as carriers paused spending after a big post-COVID upgrade cycle.
Why do investors care?
Investors are betting that the global 5G buildout is a multi-decade infrastructure wave, not a one-time event — and Ericsson has a front-row seat. The bear-to-bull story hinges on carrier spending recovering after a sharp slowdown in 2023-2024, especially in North America where AT&T and Verizon are major customers. The enterprise private networks business is a genuine new growth avenue: imagine a BMW factory running its own dedicated 5G network to connect robots and sensors — Ericsson wants to supply that. If Ericsson can grow software revenues, its profit margins could improve significantly over time.
Deep Dive
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