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Ericsson reported a $2.84B loss for Q3
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US network sales have dropped
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It has taken a $2.9B charge on its Vonage buy
Lots of operators, vendors, and trade bodies are talking up the value of network APIs in allowing developers and enterprises to develop new 5G applications.
So, trust Swedish sourpusses Ericsson to offer a somewhat gloomier take on the API lovefest on their third quarter earnings call Tuesday.
More specifically, the company CEO Börje Ekholm said he expected the early APIs to deliver "small revenues" through 2023 and 2024.
"I think the fair thing is to expect [meaningful API revenue] during 2025 in reality because we really need to get not only several operators involved, we need to get the industry and the developers to start using the APIs as well for this to scale, and it's hard for them — or actually impossible for them — to use it before we've gotten the operator community signed on to a similar type of solution," Ekholm stated.
APIs, however, are the least of Ericsson's concerns for its third quarter. The company announced a $2.9 billion impairment charge on its $6.2 billion acquisition of cloud platform provider Vonage, as well as a 60% drop in network sales in North America on the Wednesday before the earnings.
Ekholm said that Ericsson is investing in Vonage to grow the Global Network Platform (GNP), which will provide ample growth opportunities in the future and "position Ericsson to be a completely different company in a few years' time. That's really the underlying strategy behind the Vonage acquisition," he said.
There are going to be some growing pains along the way though.
Ekholm noted that on the call that Ericsson had signed agreements with Telefonica to deploy its cloud radio access network (RAN) and Open RAN on "an industrial scale."
"We believe networks in the future are going to be much more open, and we're always better off leading that, and that's what we invest for. We see that working with leading customers, including the U.S. operators as well," the CEO stated.
Ericsson reported a loss of $2.84 billion for the third quarter, on revenue of $5.96 billion.
Ericsson's stock (NASDAQ: ERIC) was trading down 2.94% at $4.62 after the earnings call.