MOBILE telecoms equipment maker Ericsson said on Wednesday (Jul 3) it will record a non-cash impairment charge of 11.4 billion Swedish crowns (S$1.5 billion) in the second quarter of 2024, the second writedown on its acquisition of Vonage.
The impairment charge reflects lower anticipated market growth in some of Vonage’s current portfolio, the company said.
The Swedish telecom gear maker bought cloud communication firm Vonage in 2022 for US$6.2 billion.
“Given deterioration in the market environment and elective decisions we have made to refocus our investments in strategically prioritised areas, we have reassessed certain growth assumptions,” Vonage chief executive officer Niklas Heuveldop said.
We continue to advance our strategy to build a Global Network Platform for network application programming interfaces (APIs), which was the strategic impetus for the Vonage acquisition, he added.
This comes after Ericsson said in 2023 it recorded a 32 billion Swedish crown impairment charge related to the acquisition.
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At the time of the deal, it was decided that Vonage would operate as an independent unit of Ericsson. Heuveldop was appointed new Head of Business Area Global Communications Platform and CEO of Vonage earlier this year. REUTERS
