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‘We plan to invest more in India’

Telefonaktiebolaget LM Ericsson, the world’s largest telecom equipment manufacturer, supplied its first product to India more than 100 years ago, in 1903. Its president and CEO Carl-Henric Svanberg spoke to Manoj Gairola.

business Updated: May 17, 2009 22:56 IST

Telefonaktiebolaget LM Ericsson, the world’s largest telecom equipment manufacturer, supplied its first product to India more than 100 years ago, in 1903. Its president and CEO Carl-Henric Svanberg spoke to Manoj Gairola.

Excerpts

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On US President Barack Obama and his objection to outsourcing

We should understand that politicians in tough times express concern to outsourcing. There is a trend that different manufacturing and R&D activities will get outsourced to low-cost countries.

One has to understand that major layoffs are being made. Outsourcing is not responsible for it. In 2003, we were 47,000 people worldwide. Today from 47,000 we are 78,000 people. While we laid off 10,000 people, we’ve added 40,000 new. There is a net increase of 30,000.

On whether outsourcing will continue

That is a trend that will continue. We have outsourced our manufacturing to a large extent and then Bharti Airtel and other players have outsourced their network operations to us. Business is always looking out where is the task best performed.

On India plans

India is a very good place to be in and has been a home country to managed services and outsourcing. This concept started here and is clearly moving in the direction of managed services. We plan to invest more in India. We will double our employees in R&D in three years, to 560. India, Sweden, China and Brazil are self sufficient countries where we do R&D, manufacturing, sales and services.

On the impact of recession

Not very much on mobile telephony. You can see that operators are being affected on the fixed side because that’s where you find SMEs. If SMEs tighten their belt, then fixedline will be effected.

For the last two years, we have started a cost reduction programme of $2 billion (Rs 10,000 crore) based on changes in IP technology. We can use same hardware for roll outs and we can use the same software platforms for development.

On how long the recession may be expected to continue

The financial specialists have said that recession is to continue for some time. However, a statement from Obama says that there are signs of improvement. This means the bottom has been reached. However, 2009 is going to be a tough year.