The mobile network equipment maker, Ericsson has planned to wind up its modem business. The move will help the company to shift its resources to develop radio networks and invest in research and development.
The decision of shutting down the modem business has come after the company completed the evaluation of the future of modem market. The company had earlier asserted an evaluation of the future of the business in 2013 when STMicroelectronics pulled out from the joint venture for LTE thin modem operations. After the modems business was integrated in Ericsson in August 2013, it had reported 1.7 billion Swedish crowns as operating losses.
Ericsson believes that since the strategic change will commence from the January 2015, a reduction in the costs related to modem business will have no effect on profit-loss account for the second half of 2015.
This move by Ericsson, however, would affect more than 1,500 employees globally. At present, Ericsson employs 1,582 employees at its modem division, with 689 in Sweden, 235 in India and the others in Germany, China and Finland.
