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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (5156)	5/2/2003 11:06:05 PM
From: elmatador	Respond to of 5390

Global: Ericsson Laments State of US Market WMRC May 02, 2003 Loss-making Ericsson, the world's leading supplier of mobile networks, has highlighted its concern about market conditions in the US. Ericsson's US chief Urban Gillstrom told Sweden's Dagens Industri that he believes the US market to be 'at a standstill just now'. Explaining his anxieties, Gillstrom continued by citing as outdated official market studies calculating US unit sales of between 90m and 95m for 2003 - Ericsson now considers 88m a more likely figure. The first three months of 2003 saw fewer US phone sales than in Q1 2002 and Gillstrom refused to clarify his firm's market share in the US, save suggesting it is on a par with its world market share, which is 6%. Without elaborating on Ericsson's current share of the code division multiple access (CDMA) market, Gillstrom underlined the company's commitment to doubling its present slice. Sony Ericsson has previously stated its aim to become the world's leading handset maker by 2006, but a recent 28% drop in year-on-year sales has borne out its admission in February 2003 that this target was too optimistic.

To: Jim Oravetz who wrote (5156)	5/13/2003 12:29:08 AM
From: elmatador	Respond to of 5390

Ericsson and Nokia could profit from the political environment consolidating before the mob could do. Reason being no such consolidation is feasible among other big telecom vendors. It is unthinkable a consolidation between Alcatel and Lucent, along the lines of the one worked out two years ago. Such a deal would be politicized: French didn't support Bush coalition or Lucent should stick to its crown jewel Bell Labs which can't make a difference now but it could be said to have national 'security' value. A Siemens Motorola deal, in which Siemens would swap its mobile terminals for Motorola's infrastructure, also would suffer by the fact that Germany didn't support Bush' war. So where any consolidation would come from? Nortel? Not likely, since Nortel is seem as a national champion in Canada and has no appeal for an European vendor. Could only partner with Lucent. Only Nokia Ericsson remain a real possibility: The best bet for Ericsson would be to use the page of Siemens/Motorola book and swap its mobile terminals for Nokia's infrastructure (Fixed-line part of Nokia: ADSL, small and switch plus microwave businesses also would come into Ericsson fold). Nokia concentrates in terminals -and, perhaps most important, fending off MSFT- and Ericsson would concentrate in infrastructure. Nokia would love to have MSFT not talking to Ericsson and the deal would let Nokia breath since MSFT would go away. Ericsson would unload Sony-Ericsson which have not been as successful as it was envisaged. It would re-establish Scandinavia as the real mobile thoroughbreds and a force to recon with. It would send a message to Samsung that they would have an uphill battle. It would leave Siemens, Alcatel and Motorola (with their very tiny share of the market) and with a sizeable European competitor.

To: Jim Oravetz who wrote (5156)	5/20/2003 12:57:22 PM
From: Jim Oravetz	Respond to of 5390

Ericsson Is Best-Known Case Of Two-Class Share System As EU Threatens to Dismantle That System, Proponents Say Ericsson Should Be Exception By BUSTER KANTROW DOW JONES NEWSWIRES STOCKHOLM -- It doesn't take long to settle disputes when shareholders of Telefon AB L.M. Ericsson gather. Take this year's shareholders meeting. After several small shareholders criticized a board proposal, the chairman called for a roll-call vote, starting with the largest owners. The suspense was finished in a matter of seconds. Ericsson's four largest shareholders each said they backed the proposal, and the chairman announced more than 90% of the votes present had been cast in support. The curious thing: the four shareholders own about 35% of the shares represented at the meeting. Ericsson is the best-known example of Sweden's two-class share system, which gives owners of certain shares more voting power than others. The European Union is threatening to dismantle the system, saying it is unfair and an obstacle to cross-border consolidation. The telecommunications-equipment maker's A shares carry 1,000 times the voting power of the more widely traded B shares. A group of shareholders is trying to agree on a way to reduce the ratio to 10 to 1, similar to at many Swedish companies, but missed a self-imposed deadline. The imbalance in power produced by the Ericsson arrangement is even more pronounced than illustrated by the shareholders meeting, where many small owners don't bother to show up. Ericsson's biggest shareholders, Investor AB and AB Industrivaerden, control 67% of Ericsson's voting rights despite owning about 8% of its shares. This has given the two Swedish investment groups a strategic stranglehold on Ericsson's shareholder decisions. Although the Nordic countries are trying to fight the EU proposal, even defenders of the two-share system support change at Ericsson. Ericsson is "a situation where you have too much of a good thing," said Tomas Nicolin, chief executive of the Third AP pension fund, which owns A and B shares in Ericsson. "The A shareholders are fully aware of that and want to change it as well." Since the mid-1900s, Swedish companies have been allowed to establish no more than a 10-to-1 differential between the voting rights on A and B shares. Ericsson, which was founded during 1876, was allowed to retain its system. Criticism of Ericsson's structure has grown as its fortunes have worsened. Critics say Investor and Industrivaerden were too slow to react as the company allowed its mobile-phone business to wither, and then the telecom-equipment market fell into a deep slump. Ericsson has lost more than 40 billion Swedish kronor (€4.36 billion or $4.97 billion) since the start of 2001. Investor and Industrivaerden agreed to work with other shareholders toward a change last year, as Ericsson sought to rally shareholder support for a 30 billion kronor rights issue to bolster its balance sheet. The resulting study group, which includes more than a dozen Swedish institutional owners and is led by Ericsson Chairman Michael Treschow, had hoped to unveil a proposal by this spring. Mr. Treschow blamed legal and tax complications for the failure to meet that deadline. He has said he is optimistic a compromise can be reached but he and others in the group have stopped short of promising a resolution. An Ericsson spokeswoman declined to comment on the group's progress. Asked whether any change would have an impact on day-to-day operations, she said: "It's an ownership question. It has nothing to do with our business." Even an agreement that satisfies the study group's goals is likely to leave some shareholders unhappy. The discussion group agreed owners of A shares should get compensation for relinquishing power, members said. That has some other shareholders upset. In a denunciation of the company's management at the shareholders meeting, Britta Unterberg, a portfolio manager for Deutsche Bank AG's DWS Investment arm, said the A shareholders deserve no compensation, given the plunge in Ericsson's share price. Compensation "would reward 'strong owners' for a weak performance," said Ms. Unterberg, whose investment group is Europe's largest mutual-fund manager. She said DWS cut its Ericsson stake to one million shares but would like to invest further in the company one day. She said: "We cannot commit any of our €118 billion in funds to companies that do not give us an equal vote to match the capital we risk." Write to Buster Kantrow at buster.kantrow@dowjones.com2 URL for this article: online.wsj.com