Ericsson is taking charges of 6.1B kronor (about €600m) in its Q4 results in order to rearrange its Business Support System (BSS) unit and cut losses there.
Of that amount, 3.1B kronor (€300m) is set for restructuring charges, the company says.
The Digital Services segment has yet to join the rest of the company in its turnaround and that's jeopardizing the unit's overall profitability target for 2020, Ericsson says.
The provisions mainly relate to estimated costs associated with expected changes in project scopes -- including customer compensation payments, provisions for project delays, and write-down of intangible assets. The moves will "materially" cut losses in BSS as soon as this year. And the company anticipates another 1.5B kronor (€150m) in charges to come in 2019, including related headcount reductions.
The company’s past BSS strategy included pursuing large transformation projects based on pre-integrated solutions, including development of a next generation BSS platform, the full-stack Revenue Manager. The strategy has not been successful and to date the full-stack Revenue Manager has not generated any revenues.
More details will be provided along with earnings on January 25 2019..