Telecom giant Ericsson says Europe’s industry structure is ‘probably unsustainable’

The chief executive of Swedish telecom company Ericsson on Monday warned Europe’s industry structure is likely unsustainable, calling for consolidation across the region to boost competitiveness.

The comments come shortly after the company, which is one of the world’s biggest providers of 5G mobile networks, announced it is planning to cut 8,500 jobs as part of its cost-cutting measures.

“The big problem in Europe is really that our customers can simply not afford to build out the networks and I think that is going to hurt European competitiveness long term,” Ericsson CEO Börje Ekholm told CNBC’s Karen Tso at Mobile World Congress in Barcelona, Spain.

Asked how the region can address this issue, Ekholm replied, “You know my view on this, I do believe Europe needs to consolidate.”

Ekholm said in countries such as the U.S., China and India, consolidation had meant there were now just two or three operators nationwide.

In Europe, however, “it is 200 operators, pretty much four plus in almost every country. It is an industry structure that is probably unsustainable and that needs to be addressed,” Ekholm said.

Ericsson’s chief executive said it was still “very, very early” in the 5G journey but tipped India to build one of the world’s strongest 5G networks in the next few quarters.

Ekholm said that India would also “probably start to drive innovation on top of the network well before many other countries.”