-- Ericsson To Reorganize On Client Lines --
Monday September 28 2:34 PM EDT
STOCKHOLM (Reuters) - Swedish telecoms equipment maker LM Ericsson plans to restructure itself along client rather than
product lines, chief executive Sven-Christer Nilsson was quoted as saying today. ''Our customers can be divided into three
groups: consumers, network operators and normal companies,'' he said in an interview in the Svenska Dagbladet newspaper.
These three client areas will be the framework of Ericsson's new organization, which will be a matrix also including geographical
divisions.
At present fixed and mobile telephony are in different divisions. ''We are sticking to Ericsson's strategy of being a supplier of
complete telecoms solutions,'' Nilsson said. q e and fixed telephony in an integrated fashion,'' he was quoted as saying. Ericsson
is to announce details of a restructuring on October 12, following a review of the company's organization by Nilsson, who took
over as chief executive on March 30. There has been speculation, fueled by the purchase of a prime office site in central
London, that Ericsson plans to move its headquarters outside Sweden because of high taxes and an unfriendly business
environment. Nilsson declined to comment on this question. ''That is one of the pieces of the jigsaw and so I can't say anything
now,'' he said. But the newspaper said that it believed the chief executive would remain in Sweden because that is where the
main development activity is and the company wants to continue to profile itself as Swedish. Nilsson noted that Ericsson's
business had been transformed by telecoms privatization and deregulation. ''Fifteen years ago we had 100 customers around
the world. Today we have more than 1,000 customers in one country, and many of them are global,'' he told the newspaper.
This requires a completely different structure to coordinate the business, and the company will be more centralized, he said.
''I can be authoritarian. Not in the sense that I am always telling other people what to do -- I am a good listener. But I am not
afraid to take decisions and give clear commands if necessary,'' Nilsson said. Nilsson said the Internet would be the common
strand running through all Ericsson's products. ''In the new telecoms world there will no longer be divisions between fixed and
mobile telephony. Instead we will go directly in the multimedia world of the Internet,'' he said. A weak world economy could
delay new technology, but Ericsson's growth is guaranteed by rapid growth in mobile telephony, he said.
''Mobile telephony is now taking call time from fixed telephony,'' he said. ''I cannot decide whether there will be a world
depression or only a mild recession. But we are a company which is used to working in shaky economies,'' he added.
Nilsson forecast that wireless communication via satellite would take over from cable as the main form of telecommunications.
''Wireless communication will become more important because it is simple and cheap. You don't have to dig cables into the
ground,'' he said.
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