Ericsson awaits more Cingular spending

Slow spending from the former Cingular Wireless (now AT&T) dragged down Ericsson’s North American business in the second quarter, but analysts expect a rebound in the second half of the year.

Ericsson’s revenue from North America was down 18% from a year earlier to about 3 billion Swedish kronor, or about $450 million, in the second quarter. A pause in spending from AT&T on the Cingular network was mostly to blame, but analysts expect the carrier to speed up 3G equipment purchases in the second half of this year.

Asked in a conference call when Ericsson’s North American business might return to growth, Chief Executive Officer Carl-Henric Svanberg said, “It’s a good question. I don’t think we can answer that precisely. It’s in the reach to go to [positive] numbers. It’s doubtful how much [Cingular] can get things going before year-end.”

Revenue from Latin America was up 7% from a year earlier and that from Europe was essentially flat in the second quarter, with modest growth expected for the rest of the year, due to carrier consolidation and network sharing there. But revenue from Asia was up 32% from a year earlier to nearly 17 billion kronor, or about $2.5 billion. Ericsson’s overall revenue was up more than 6% from a year earlier.