Communication giant Ericsson was investigated for corruption
Ericsson, the former communications giant, seems to be in trouble. On June 17, it was confirmed that Ericsson had been investigated by the US government because of its involvement in corruption. Ericsson also said on June 19 that seven current and former employees were summoned by Greek authorities for corruption.
For a long time, Ericsson has been in a development dilemma because of various factors: the strength left by the era of giants is still there, but it has been in danger. Its latest financial report for the first quarter of 2016 showed that its revenue fell 2.4% year on year, and its performance fell short of expectations; However, Huawei in China has achieved overall catch up in 2014, replacing Ericsson as the world's number one in the communications industry.
Under the "internal and external problems", Ericsson is seeking reform, trying to cope with the impact of the new market pattern through business adjustment and cost reduction.
On June 16, Swedish media reported that Ericsson was undergoing an internal investigation jointly conducted by the Securities and Exchange Commission of the United States and the Ministry of Justice, which may be related to the company's corruption in China.
Ericsson's official response on June 17 said that in March 2013, Ericsson received an investigation request from the relevant departments of the U.S. government to cooperate in answering a series of questions about Ericsson's business operations. In 2013, it confirmed this to the media. At that time, Ericsson cooperated with relevant departments of the US government to answer relevant questions.
In addition to mentioning that the investigation is related to Ericsson's anti-corruption plan and the U.S. Foreign Corrupt Practices Act, Ericsson refused to provide more comments in its response.
Ericsson China said that it would not comment on the speculation of the media.
Coincidentally, two days after the response on the 17th, Ericsson sent a document on the 19th, saying that seven current and former employees were summoned by Greek authorities for suspected corruption. These seven employees were involved in an investigation of Greek defense engineering transactions.
Previously, Ericsson had been involved in corruption for many times in the Chinese market alone, and several employees had been involved in a corruption case of a Chinese communication operator. Most typically, Han Xinlin, the general manager of Ericsson Guangzhou Branch in China, bribed the company's executives 500000 yuan in 2013 in order to obtain the engineering project of a communication group Guangdong Branch in China.
In the view of Xiang Ligang, an analyst in the communications industry, the Chinese government has increased its efforts to combat corruption in recent years, but in the domestic communications industry, bribery is not uncommon in order to win orders. "Because this industry is different from other industries, the purchasers of communication equipment are concentrated in the hands of a few people. As long as it is taken down, the signed bill may be hundreds of millions or even billions of yuan."
Ericsson had a good time in China's communication market. In the early TD-CDMA (3G) era, it occupied an absolute monopoly position in China's communication market. An employee who has worked in another communication company in Europe for many years introduced that in the GSM (2G) market in China, foreign technology accounted for more than 80%, of which Ericsson accounted for the largest proportion.
Miao Wei, minister of the Ministry of Industry and Information Technology, said in May this year that China has built the world's largest 4G network, with more than 2 million base stations and more than 500 million users.
According to media reports, in the 4G bidding of China Mobile, China Telecom and China Unicom, ZTE, Huawei and other domestic equipment manufacturers have accounted for more than half of the total shares. Although Ericsson has also maintained a stable share, there is a significant gap between Ericsson and Huawei.
From the financial reports of Ericsson and Huawei in recent years, Ericsson's total revenue in 2013 was 35.2 billion dollars, and Huawei's total revenue was 39.2 billion dollars. However, from the perspective of communication operator business alone, Huawei's revenue of 27.1 billion dollars fell behind Ericsson's $35.2 billion dollars. At this time, Ericsson still remained the industry leader in terms of operational business; However, by 2014, Huawei's total revenue had reached 46.5 billion dollars, including 31 billion dollars in operator business and 29.3 billion dollars in Ericsson's total revenue. Huawei has achieved a comprehensive surpass of Ericsson.
