Telecoms equipment manufacturer Ericsson announced a 74% fall in revenue from the Chinese market in Q3 of 2021, pushing the Swedish company to reconsider its business strategy in the country, reports Caixin. In the third quarter, Ericsson generated a revenue of $151.3 million in China, compared with $581.5 million in the same period of last year. This followed a year-on-year drop of 63% to $174.4 million in China revenue in the second quarter of the year.
The share of China in Ericsson’s global revenue dropped to around 4% in the first three quarters of 2021 from 8% in the same period of last year, the company said. The slide comes against the backdrop of Stockholm’s decision last year to exclude Chinese vendors from the country’s 5G networks.
“As a consequence of the loss in sales in China, we have to right-size our sales and delivery organization in China, and that will start in the fourth quarter,” Ericsson CEO Börje Ekholm said during the company’s earnings conference call on Tuesday. He added that the company needed to adjust its cost structure as much as possible in the short run to reduce losses in China.