. Last Updated: 07/27/2016

Ericsson Touts Sales Boom

Swedish telephone company Ericsson has almost doubled its turnover in the Russian market over the past financial year, company officials said Monday, predicting further growth as demand in the telecoms sector continues to rise.

Ericsson, which also doubled its turnover the previous year, netted more than $250 million in sales, chief executive Lars Ramquist told a news conference, and has another $400 million in contracts pending.

"Russia is rapidly evolving into an exceptionally important market for Ericsson," Ramquist said, ascribing the growth partly to a generally healthy environment for the telecommunications industry in the country. But while Ericsson expects the boom in sales to continue, officials said it was still too early to consider local production.

"Experience tells us that local business is yet to reach the size when production becomes economically feasible," Ramquist said, adding that the Swedish firm would continue to step up its investments in sales and branch office network across Russia, where it already operates in more than 50 cities.

Meanwhile, company policy will focus on technology transfers through joint ventures and engineer-training programs that will help the company's Russia operation achieve self-sufficiency.

Ericsson, which opened a Moscow representative office in 1994, recently concluded an $8 million deal with the city administration to supply radio-communications systems to several city administrative departments. It aims to provide at least 40 percent of the telephone lines to be installed nationally over the next 10 years.

"A major factor in the company's success in Russia has been close cooperation with government agencies," said Yngve Redling, president of Ericsson's local subsidiary, Ericsson Corporatia.

Those close relations were underlined in the choice of venue for the news conference: the Kremlin, where Ericsson is one of the sponsors of an exhibit about the history of Vikings in Russia. The event was held to mark 115 years of operations in Russia, dating to an order from St. Petersburg in 1881.

Ericsson, which generated $20 billion in sales worldwide last year, claims to hold more than 70 percent of Russia's mobile systems market, and is seeking to improve its hold over digital phone networks, officials said.

Last May the firm signed a $28 million equipment and systems installation contract with a Moscow-based cellular service, Vimpelcom.