Ericsson Business Model Canvas

Ericsson actively collaborates with technology and software vendors to broaden its product and service offerings. These partnerships are crucial for integrating advanced capabilities like artificial intelligence and robust cybersecurity solutions into Ericsson's core infrastructure. For instance, in 2024, Ericsson continued its focus on AI-driven network optimization, partnering with specialized AI software providers to enhance operational efficiency for its clients.

These strategic alliances allow Ericsson to deliver more complete, end-to-end solutions that address the intricate demands of modern enterprises. By teaming up with companies that excel in niche software areas, such as enterprise resource planning or specialized cloud services, Ericsson can present a unified and powerful value proposition. This approach ensures Ericsson's solutions remain at the forefront of technological innovation, providing customers with a competitive edge.

Ericsson's key partnerships extend to semiconductor manufacturers, crucial for sourcing the advanced chips that power its network equipment. These collaborations ensure access to leading-edge processing power and specialized components essential for 5G and beyond.

For instance, in 2024, Ericsson continued its strategic relationships with companies like Qualcomm and Intel, leveraging their latest chipsets to enhance the performance and efficiency of its radio and core network products. These partnerships are vital for maintaining a competitive edge in the rapidly evolving telecommunications hardware market.

By working closely with semiconductor innovators, Ericsson can integrate new functionalities and optimize power consumption in its solutions, directly benefiting its mobile operator clients with more capable and cost-effective networks.

Ericsson's managed services and network operations are a cornerstone of their business, where they take full responsibility for running and maintaining a telecom operator's network infrastructure. This means Ericsson handles everything from day-to-day operations and fault management to performance tuning and upgrades, ensuring the network runs smoothly and efficiently.

This service allows clients to offload the complex and capital-intensive task of network management, freeing them to concentrate on strategic growth and customer experience. Ericsson's expertise ensures high network availability and optimal performance, which is critical in today's demanding connectivity landscape.

These agreements are typically long-term, providing Ericsson with a stable and predictable recurring revenue stream. For instance, in 2024, managed services continued to be a significant contributor to Ericsson's revenue, reflecting the ongoing demand for outsourcing network operations among telecom providers seeking to reduce costs and improve efficiency.

Ericsson's key activities revolve around the research, development, deployment, and management of telecommunications network infrastructure and software. They invest heavily in R&D for future technologies like 6G, and in 2024, continued to focus on AI-driven solutions. Their core operations involve installing and integrating advanced mobile networks, with significant 5G deployment efforts ongoing globally. Furthermore, Ericsson provides managed services, taking on network operations for clients, which in 2024 remained a substantial revenue contributor due to demand for cost reduction and efficiency improvements.

Ericsson's established global network infrastructure is a cornerstone of its business model, built upon a vast installed base of network equipment and software spanning numerous countries. This extensive footprint allows Ericsson to efficiently serve a broad and diverse customer base, from major telecommunications operators to enterprise clients.

This widespread presence not only facilitates the seamless introduction of new services and upgrades to existing deployments but also creates a formidable barrier to entry for competitors. For instance, by the end of 2023, Ericsson reported a significant number of live 5G sites globally, underscoring the depth of its infrastructure.

Ericsson's key resources encompass its vast intellectual property, particularly in mobile communication technologies, and its extensive global network infrastructure. These are complemented by a strong brand reputation built on decades of reliable service and deep customer relationships. The company also leverages a robust global supply chain and manufacturing capabilities to ensure efficient delivery of its complex solutions.

Ericsson empowers network programmability via open APIs, enabling operators to unlock new revenue streams and foster innovation. This strategic move allows for flexible service creation, granular network slicing, and seamless integration with third-party applications, fundamentally shifting from basic connectivity to value-added services.

The Aduna joint venture exemplifies this strategy, demonstrating how programmable networks can drive new business models and revenue opportunities. By opening up network capabilities, Ericsson facilitates dynamic service deployment and opens doors to previously untapped markets.

Ericsson provides cutting-edge 5G, 5G Advanced, and foundational 6G technologies, ensuring operators achieve superior network performance and energy efficiency. Their managed services and automation reduce operational costs, with a 2024 focus on energy-efficient solutions critical for managing surging data traffic and lowering total cost of ownership.

Network programmability via open APIs unlocks new revenue streams and fosters innovation, enabling dynamic service deployment and new business models, as exemplified by the Aduna joint venture. Ericsson's commitment to enhanced security and reliability safeguards critical network infrastructure, ensuring uninterrupted and secure connectivity.

Ericsson's sales approach is deeply consultative, prioritizing a thorough understanding of each client's unique business challenges and strategic goals. This focus on partnership allows them to move beyond transactional product sales.

Their experts collaborate with customers to craft bespoke solutions, directly addressing specific needs and ensuring the offered technology aligns perfectly with the client's objectives. This tailored approach, exemplified by their work with major telecom operators in 2024 to deploy advanced 5G capabilities, fosters strong, trust-based relationships.

Ericsson's customer relationships are built on a foundation of deep collaboration and tailored support, moving beyond simple product sales to become strategic partners. This consultative approach, where experts work closely with clients to craft bespoke solutions, was particularly evident in 2024 as they helped operators deploy advanced 5G capabilities.

The company's commitment to customer success is further demonstrated through comprehensive professional services, including network planning, optimization, and deployment, alongside robust training programs. In 2024, Ericsson's services segment contributed significantly to its revenue, accounting for approximately 20%, underscoring the value customers place on this ongoing support and expertise.

Ericsson actively nurtures these relationships through engagement at industry events like Mobile World Congress 2025 and by sharing thought leadership content, fostering a sense of community and reinforcing their innovative market position.

Ericsson's global distribution and service networks are a cornerstone of its business model, enabling the efficient delivery of cutting-edge technology and support across the globe. These networks are crucial for managing the complex logistics of deploying and maintaining network infrastructure, from vast data centers to remote cellular towers.

In 2024, Ericsson continued to invest heavily in its global service capabilities, with a workforce of over 100,000 employees, a significant portion of whom are dedicated to service delivery and support. This extensive physical presence, including numerous service centers and field technicians, ensures rapid response times and localized expertise for clients in over 180 countries.

The efficiency of these networks is directly tied to Ericsson's ability to maintain and upgrade telecommunications systems, a critical function in a world increasingly reliant on connectivity. For instance, their field service teams were instrumental in the ongoing 5G network rollouts throughout 2024, ensuring seamless deployment and operational readiness for mobile operators.

Ericsson's channels are multifaceted, combining direct sales for major accounts with a strong partner ecosystem for broader market reach and specialized solutions. Digital platforms serve as a crucial self-service and support hub, enhancing customer convenience and efficiency.

In 2024, Ericsson's direct sales force was pivotal in securing large telecommunications contracts, while its partner network, including system integrators and ISVs, facilitated the delivery of tailored enterprise solutions. Digital channels saw increased usage for customer support, with a significant percentage of routine queries resolved online.

The company's global distribution and service networks are essential for deploying and maintaining complex network infrastructure, with over 100,000 employees dedicated to service delivery in 2024. These extensive networks ensure localized expertise and rapid response across more than 180 countries.

Ericsson's strategic alliances and joint ventures, particularly with cloud providers, expanded its market penetration and allowed for co-creation of advanced solutions in 2023, contributing to global 5G network advancements.

Communication Service Providers (CSPs) represent a broad customer base for Ericsson, extending beyond mobile network operators (MNOs) to include fixed-line providers and emerging cloud communication platforms (CPaaS). This segment also encompasses entities keen on leveraging network APIs for innovative services.

Ericsson's strategic partnership, the Aduna joint venture, directly addresses this diverse CSP segment, aiming to unlock new revenue streams driven by software and advanced network capabilities. This initiative highlights Ericsson's commitment to evolving its customer engagement beyond traditional telecom infrastructure.

Ericsson's customer segments are diverse, ranging from traditional Mobile Network Operators (MNOs) to emerging enterprise and public sector clients. Each segment has unique needs, driving Ericsson's tailored solutions and strategic focus.

MNOs remain the core revenue driver, with enterprise and public sector segments showing significant growth potential, particularly in private 5G and critical communications. Media and entertainment companies represent another key area, leveraging Ericsson's advanced networks for content delivery and immersive experiences.

The company's strategy involves deepening relationships with existing CSPs while expanding into new verticals, capitalizing on the global demand for enhanced connectivity and digital transformation. This diversification is crucial for sustained growth and market leadership.

Ericsson’s Sales, General & Administrative (SG&A) expenses encompass the costs of its global sales force, marketing campaigns, and essential administrative operations. These are crucial for market presence and operational efficiency. For instance, in 2023, SG&A represented a significant portion of their operating expenses, reflecting ongoing investments in market development and corporate functions.

The company actively pursues efficiency initiatives to streamline these costs and boost profitability. This includes optimizing sales processes and reducing overhead, which can sometimes lead to restructuring charges. These efforts are vital for maintaining competitiveness in the dynamic telecommunications sector.

Ericsson's cost structure is heavily influenced by its substantial investments in Research and Development (R&D), as well as the operational expenses of its manufacturing and supply chain. Personnel costs, encompassing a global workforce, are also a major outlay, with the company actively managing these through efficiency measures. Additionally, costs related to acquiring and maintaining intellectual property, including licensing fees, form a significant part of their financial commitments.

Managed Services Contracts represent a significant recurring revenue stream for Ericsson, stemming from long-term agreements where they take on the management, operation, and optimization of telecommunications networks for their clients. This model ensures stable and predictable income, fostering deeper, more integrated customer relationships.

In 2023, Ericsson reported that its managed services segment continued to be a cornerstone of its business, contributing substantially to its overall revenue. The company's focus on network evolution, including 5G deployment and ongoing operations, underpins the value and longevity of these contracts.

Ericsson's revenue streams are diverse, encompassing hardware sales, software licensing, managed services, professional services, and intellectual property rights (IPR) licensing. These multiple avenues ensure a robust financial foundation, driven by the global demand for advanced telecommunications infrastructure and innovation.