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Technology Stocks : Ericsson overlook?
ERIC 9.505-0.2%Dec 5 3:59 PM EST
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To: Tri Vo who started this subject5/23/2001 5:37:34 PM
From: Puck   of 5390
 
Ericsson: Committed Financing On Only 2 3G Contracts

STOCKHOLM -- Sweden's Telefon AB LM Ericsson (ERICY) has committed to provide vendor financing for only two of the third-generation contracts that it has secured so far, Chief Financial Officer Sten Fornell said Wednesday.

Speaking at an investors conference in New York, Fornell said the financing commitments in both cases are for amounts larger than the value of the contracts. He did not identify the recipients.

The deals involved "a little bit more than pure equipment," he said.

Ericsson said it has secured all or part of 30 of 51 of the third-generation networks contracts announced so far.

Vendor financing occurs when equipment suppliers provide equipment on credit and sometimes conventional loans to customers. It has come under scrutiny because some telecommunications-equipment vendors in the U.S. have been unable to recoup their commitments from startup customers.

Ericsson reiterated Wednesday that it will take a conservative approach to providing additional vendor financing.

Fornell said he believes the competitive pressure to provide financing to customers is abating. "I think there has been a sobering when it comes to all players for the time being," he said. "I'm quite optimistic that this will be handled in a good way, with a big part (of the financing) in the capital markets."

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