ERIC Ericsson

By Matthias Verbergt 

STOCKHOLM-- Ericsson AB named Börje Ekholm as its new chief executive Wednesday, as the struggling Swedish telecom-equipment provider looks to turn around its business amid waning demand and stiff global competition.

Mr. Ekholm, a member of Ericsson's board over the past 10 years, joins Ericsson's executive team from his position as CEO of Patricia Industries, a division within Investor AB, a Swedish investment company that is Ericsson's largest shareholder, controlling over 20% of its voting rights.

Mr. Ekholm, 53 years old, will replace acting CEO Jan Frykhammar on Jan. 16 and will remain a member of the Ericsson board.

Ericsson had been looking for a new CEO since it ousted Hans Vestberg in July, as the company is battling slowing demand for its cellphone towers and switches and faces fresh competitive threats from China's Huawei Technologies Co. and Nordic rival Nokia Corp.

Last week, Ericsson reported it plunged to a third-quarter loss, hit by slower spending by mobile-service providers on latest-generation, or 4G, networks, as many mobile-broadband projects were completed last year.

Leif Johansson, chairman of Ericsson's board of directors, said the company picked Mr. Ekholm about two months ago because of his background in technology and telecommunications as well as previous CEO experience at listed companies.

But the succession process dragged out, in part because Mr. Ekholm, who has both Swedish and American citizenship, insisted on continuing to live in the U.S.

"For me, it was a prerequisite," Mr. Ekholm said in an interview, adding that managing Sweden's flagship tech company from across the Atlantic would be "odd."

Analysts questioned Mr. Ekholm's ability to turn the company around given his decade-long tenure as a board member, alleging the role makes him partly responsible for the company's decline.

"It's a relevant question and clearly a consideration," Mr. Ekholm said, stressing however the differences between his future and current role in the company.

Mr. Ekholm said he would aim to make Ericsson profitable again by prioritizing parts of its business while divesting others, but he wouldn't make hasty decisions.

"For me to enter like a cowboy saying it should be this or that way, I think it's just not the right way," he said.

Earlier this month, the company said it would cut 3,000 jobs in Sweden, as part of a global restructuring program aimed at saving 10 billion kronor ($1.12 billion) in annual operating expenses by the second half of 2017, compared with 2014.

Write to Matthias Verbergt at Matthias.Verbergt@wsj.com

(END) Dow Jones Newswires

October 26, 2016 10:16 ET (14:16 GMT)

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