Ericsson is ‘dissolving’ its enterprise wireless unit but keeping its private and neutral-host 5G portfolios, betting on R&D synergies and indoor connectivity, notably with Starlink-style satellite systems. But with Nokia’s retreat, the question remains: is Big Telecoms quitting the scene?
In sum – what to know:
Enterprise wireless – Ericsson has shunted its private 5G and neutral-host portfolios into its networks division
Some standalone – Its Cradlepoint and wireless WAN units will remain as ‘standalone’ parts of its Americas unit.
Spooked market – Nokia’s ECE sale and Ericsson’s rejig beg question about the sector’s interest in Industry 4.0.
More on this enterprise rejig at Ericsson, announced with its Q3 results – which is tempting to read as Nokia-style retreat from the ‘campus’-end of the private 5G market. It is not quite that, as presented – except Ericsson has a habit of following Nokia in this space, and so it would tally if it said it in six months it is washing its hands of it too. As it is, its ‘enterprise wireless’ business is not being sold, nor vanished completely; and yet it is being dismembered and dispersed (“dissolved, as such”), mostly into its ‘networks’ division, home to its operator portfolio. Jobs will go, including at the top; Åsa Tamsons, head of the unit, will “support the integration”, and then “transition” out (2027).
The transfer will include both its private and neutral-host 5G portfolios – presented, until recently, as useful drivers of hard-to-find revenue growth, while big telcos picked the 5G fluff out of their belly buttons. Not to be; Ericsson said in its Q3 review that enterprise sales hardly moved in the period, versus a year ago. They were up by one percent, as an organic measure – compared to seven percent for the business overall; albeit with some pre-emptive purchasing from cost-conscious customers, mindful of AI price hikes – and down 10 percent on a reported basis, including lost revenue from the sale of number portability administrator Iconectiv in August 2025.
Adjusted gross margin declined to 50 percent, also reflecting the divestment. Adjusted EBITDA was SEK 0.5 billion in the red, but improved sequentially. All in, ‘enterprise’ sales contributed eight percent of total revenue in the quarter. But chief financial officer Lars Sandstrom also cited “good momentum” for private 5G among campus customers, and “efficiency actions”, besides, to “improve profitability”. Ericsson pitched the strategy as a way to “create R&D synergies” and “scale” to “drive product innovation” and “accelerate growth”. And just as some of the detail in Nokia’s announcement on Tuesday was mis-read by the market, it is worth pausing on the stated growth strategy here.
Where certain commentators spied a strip-and-sell routine with Nokia’s private equity deal, Aurelius, the firm buying its ECE division, made clear it will put ECE into an “opportunities” growth fund, and seek, at least, to grow it – before eventually exiting, with ECE properly established as a business in its own right. Aurelius has a track record with such carve-outs, although ECE is a complex proposition. Similarly, Ericsson sounded like it has a growth plan, of some sort – and like it wants to keep the business for the time being, just at closer quarters. “The area where we have more work to do, of course, is in the enterprise segment,” said chief executive Per Narvinger in a Q&A on the Q3 earnings call.
He said: “We will dissolve the business, as such, but continue with the portfolio and solutions… We are moving neutral host and [private 5G] to networks, where we can get the better R&D muscle, and then also accelerate towards profitability.” Otherwise, the rejig looks like Nokia’s, just with everything still in house. Its old Cradlepoint business, selling enterprise 5G routers, is staying put, somehow – as a standalone business, to be ley by Yossi Cohen, also head of its ‘Americas’ division. “That business is showing strong improvements and we are getting to black numbers. So that will stay in what today is the enterprise segment,” said Narvinger.
Its wireless WAN business, offering MPW-like private wide-area 5G, will also remain a standalone unit. Its EP5G and Cradlepoint-based NetCloud/EP5G-Compact products, equivalent to Nokia’s DAC and DAC-Compact offers (and to what the likes of Celona offer) get transferred. “We are strengthening our focus on seamless connectivity and want to make sure that we can offer a rich indoor portfolio that leverages the full R&D competence in the company. We are… making changes to [the] enterprise wireless solutions to capture these R&D synergies, drive product innovation, and accelerate the growth with both operators and enterprise customers.”
The reorganization will also establish a “leaner executive team with clear accountability and ability to move fast”, he said. But most interestingly, there appears to be a change of focus for Ericsson, as well – which Narvinger touched on during the Q&A. Maybe it is an excuse, and Ericsson is “soft killing” its campus experiment, as analyst Pablo Tomasi suggested on LinkedIn. There is no question the private 5G market is spooked. What was the headline RCR wrote about the Nokia sale on Tuesday; the end of big telcos in Industry 4.0?! There is increasing evidence of this, including from the likes of Verizon and Vodafone, and Ericsson’s move will be viewed this way by many.
But Narvinger responded to a question about Starlink (effectively) – about Ericsson’s response to the furore around satellite comms – with a segue into its R&D plan for its campus 5G affairs, both private and neutral-host. He said: “Satellite will be a fantastic addition to terrestrial networks. What will be important is to have seamless connectivity between outdoor and indoor. That’s going to be one of the challenges for satellite – how to take the outdoor coverage indoors. That seamless high performing experience is going to be very, very important. That’s also one of the reasons we are consolidating our R&D efforts in the indoor segment, [moving] our enterprise wireless business into networks.”
The irony in all of this is that Ericsson, just like Nokia, appears to be trading long-term bets on heritage cellular R&D, momentarily slumped in a ‘trough of disillusionment’ on the old hype-cycle curve, just to chase short-term gambles on adjacent ‘super-cycle’ tech. Nokia has reduced itself to two product lines: optical networking for data centers and transport networks; cellular core networks and radios for mobile operators, and big enterprises. It will cream off the first, during the AI build-out in the cloud, and wait for the second to quit its navel-gazing, and hope AI-RAN (and 5G SA etc) brings it into the network edge/grid. And industrial enterprises, the most demanding 5G cases, can go jump – unless they want to buy radios, as well.
And Ericsson, all-in on slow-moving cellular anyway, sounds like it wants a piece of the Starlink (related) action, while it is red hot, and sees an opportunity to reposition its enterprise wireless capabilities as part of an indoor bridge proposition to converge satellite and terrestrial networks. Which is a perfectly sensible pitch to tie-up both enterprises and operators on private and neutral host 5G solutions. But it will spook the enterprise market, given Nokia’s exit, and there is a sense that telcos, under pressure from shareholders in the AI boom, are cutting their noses to spite their faces.
