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To: Doug who wrote (6966)	10/13/1998 10:09:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 18016

TUESDAY OCTOBER 13 1998 Europe ERICSSON: Telecoms group unveils internet strategy By Greg McIvor in Stockholm Ericsson, the Swedish tele-communications group, unveiled yesterday what it said was "an entirely new strategy", vowing to take a leading role in the fast-growing internet product market and promising annual sales growth of above 20 per cent. Sven-Christer Nilsson, chief executive, said Ericsson would move aggressively to exploit the convergence of telecoms and data networks - a trend revolutionising communications globally. In his most significant strategy statement since becoming chief executive in April, Mr Nilsson declared Ericsson would pursue a blend of organic growth and bolt-on acquisitions to become one of the world's top suppliers of data-related and internet access products. Mr Nilsson, who announced last week an extensive shake-up of senior management and a structural revamp, also presented growth targets for Ericsson's three new divisions. Sales in the Network Operators unit - which groups mobile phone infrastructure, datacom and Ericsson's traditional terrestrial phone business - would grow by more than 20 per cent annually, Mr Nilsson said. The Consumer Products unit - chiefly mobile phones - would expand at a similar rate, while the Enterprise Solutions division - catering for businesses - would grow at 10-15 per cent. Analysts welcomed the setting of specific revenue goals, although these deviated little from Ericsson's recent overall record. Group turnover has increased by an average of 28 per cent over the past five years. Neil Barton, telecoms specialist at Merrill Lynch in London, applauded the importance attached by Mr Nilsson to the budding internet product market. "This is the strategy we have wanted to see for about one year," he said. Mr Nilsson said the new business structure would better enable Ericsson to stem losses in its fixed-line phone business. He rejected suggestions from some analysts that Ericsson needed to make a multi-billion-dollar US acquisition to become a credible challenger to US-based data networking companies such as Cisco Systems. "We will be focusing on small companies which are technological leaders in their fields. We think it is a much smarter strategy than a mega-merger, which would be prohibitively expensive and dilute our earnings." Mr Nilsson's performance helped to ease some pressure on Ericsson shares, which had plunged 50 per cent from their peak in late July. The most-traded B shares surged SKr28.50, or 22 per cent, to SKr160. Shares in Nokia jumped FM54 to FM365 - in spite of Ericsson's assertion yesterday that it was not losing market share to its Finnish arch-rival in mobile phones.