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Ericsson sells Russian network support biz to local managers

Transfers group of employees to new owners, makes 400 other local staff redundant

Swedish network system maker Ericsson is the latest tech business to offload its remaining operations in Russia to local management, months after saying it was going to pull out of the country "indefinitely."

Under the progress outlined today, the wholly owned Russian subsidiary has signed an asset transfer agreement under which the local customer support business is to be sold for an unspecified amount. Schneider Electric is doing the same thing.

“The transaction includes a transfer of approximately 40 Ericsson employees, and certain assets and contracts related to the business,” the company said in a statement.

The unit is purely involved in engaging and supporting Russian customers, and that “does not involve the export of hardware, software, or related services to mobile operators in Russia”.

The telecommunications giant stopped deliveries of kit and software to Russia in late February following the country’s attack of Ukraine. The move, it said at the time, would cost 900 million Swedish crown (at the time $95.32 million) related to the impairment of assets and other exceptional costs. This did not include redundancies.

Business in the pariah state included helping build a private 5G-ready network for industrial customers with Mobile TeleSystems Public Joint Stock Company, which is Russia’s largest mobile comms provider. Ericsson also launched a 5G Innovation Hub in Moscow, and set up the Ericsson Academy, also in the capital, to provide local training.

Nokia also followed Ericsson out of the door, so to speak, seemingly leaving Russia mobile operators with only one choice of network kit – Huawei.

However, Huawei was itself rumored in October to be ending its direct presence in Russia from early next year, selling to Russian distributors via Chinese intermediaries. Huawei was reported to have closed its retail stores, and has stopped selling base stations for cellular comms.

We have asked Huawei to comment on the veracity of this report and, if correct, why it has chosen this course of action.

Ericsson concluded today: "Following Russia's invasion in Ukraine, Ericsson announced the suspension of operations and deliveries to customers in Russia and an orderly wind-down in accordance with applicable sanctions. Approximately 400 Ericsson employees in Russia have been notified of layoffs and have been leaving the company as operations have been discontinued.

"Going into 2023, Ericsson expects to have a small presence in Russia on a local basis. A legal entity owned by Ericsson will continue to be registered to complete the winddown and to fulfill legal, contractual, and administrative requirements," it added. ®

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