- Ekholm's Ericsson exit may come reasonably soon
- The Vonage acquisition may well be his downfall
- Analyst John Strand expects he could be gone before January 2026
Ericsson’s current CEO may not be in his job too much longer, as the company’s board weighs whether actions like its acquisition of Vonage for $6.2 billion have panned out to the company's benefit.
Swedish finance publication EFN said that Börje Ekholm’s days as Ericsson's chief may be numbered, citing sources, last week. They said he will be replaced as CEO by board member Jan Carlson.
During his tenure, Ekholm has presided over the acquisition of companies like Cradlepoint and Genmaker. The problem for Ekholm, however, will likely be the costly acquisition of communications API company Vonage, according to analyst and head of Strand Consult John Strand.
“I assume that they will have a new CEO before the first of January,” John Strand, CEO of Strand Consult told Fierce.
A Vonage hangover
But why? Well, it seems the Vonage deal wasn't nearly as beneficial as it was pitched to investors. In fact, it has become something of a liability.
“Ericsson has written down the investment and they will probably write it further down,” Strand noted. “This happened on Mr. Ekholm's watch and is thus his responsibility."
Recon Analytics Analyst Daryl Schoolar agreed Ekholm's failed bet on Vonage and network APIs could be his downfall - or at least the public rationale given for replacing him.
“The company has seen little in the way of returns from his six-billion dollar bet on Vonage. If it comes to that it will come with a certain amount of irony given that part of Ekholm’s early success as Ericsson CEO came from him shedding non-essential businesses,” Schoolar said.
The question many may ask themselves is what else Ericsson could have spent that money on, Strand noted.
But if the deal was so spectacularly bad, how has Ekholm managed to hang on for so long? Well, Strand pointed out that while a manager like him would be "gone by now" in many other companies, "in Sweden, and with the owners that Ericsson has, it takes a little longer to make such decisions."
Now we wait and see.