Ericsson bets on fast-growing broadband demand in Africa

November 16, 2016 1:36 AM EST

A general view of an office of Swedish telecom giant Ericsson is seen in Lund, Sweden, September 18, 2014. REUTERS/Stig-Ake Jonsson/TT News Agency/File Photo

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By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - Ericsson is betting that fast-growing demand for mobile Internet services in sub-Saharan Africa will also boost sales for the world's biggest mobile telecoms equipment maker, the Swedish company's regional president said.

"If you look at growth in mobile broadband penetration, it's going in the right direction. It is at about 35 percent right now and that's going to grow at 21 percent per year over the next six years," Jean-Claude Geha told Reuters in an interview.

Ericsson is struggling in most other regions where its customers are further advanced in developing 4G mobile broadband networks and demand for equipment for the next generation of even faster and more widely connected 5G networks is still years away.

But African mobile network operators such as MTN Group and Kenya's Safaricom are still in the process of modernizing and expanding their networks to give more and more people access to the Internet.

The region, home to more than 1 billion people, contributes 4 percent of Ericsson's annual sales of $27 billion but Geha said the company was seeing percentage sales growth rates there that were "closer to double-digit than single-digit".

"We are building 17 4G networks across the region and we're still building a lot of 3G and modernizing some of the 2G networks," Geha said. "We are expecting in the next five to six years at least 80 percent of deployed infrastructure to be 3G and 4G mobile broadband."

(Editing by Greg Mahlich)

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