Ericsson says bon Vonage to $1 billion

Details: Manny Pham; Category: Vendors; 08 July 2024; 12572 views

Ericsson announced it will book a non-cash impairment of SEK11.4 billion (US$1.1 billion) in its Q2 results, blaming cloud unit Vonage which had previously hit the Swedish vendor in the wallet.

Nine months ago Vonage cost Ericsson US$2.9 billion as a consequence of the significant drop in market capitalisation of Vonage’s publicly-traded peers, increased interest rates and overall slowdown.

This latest charge was due to intangible assets and lower market growth in some of Vonage’s current portfolio. The SEK11.4 billion charge will be filed in Q2 results that will be announced next week.

Vonage CEO and Ericsson head of business area Global Communications Platform Niklas Heuveldop said: “Given deterioration in the market environment and elective decisions we have made to refocus our investments in strategically prioritised areas, we have reassessed certain growth assumptions, resulting in a non-cash impairment.”

Despite two massive financial hits Ericsson is sticking by its cloud unit to “build a new source of monetisation for the telecom industry,” stating it is “positioned at the centre of digitalising enterprises and society through the development of the Global Network Platform for network APIs”. Vonage has signed 12 service provider partnerships, stated Ericsson. The cloud unit cost Ericsson US$6.2 billion in 2022.