Ericsson could possibly move its HQ to the U.S. but it probably won't, two analysts say
Other foreign vendors moving their HQs is also unlikely
However, Ericsson can at least make major bank off of U.S. operators
Analysts that Fierce spoke to this week are unclear if Ericsson’s CEO suggestion that the Swedish company might move its headquarters from Europe to the United States is a nod to the forthcoming Trump administration, a poke at European Union regulators, or a recognition of where the company derives a lot of its revenue from — and if this could cause other cellular equipment vendors to consider moving too.
Ericsson already has a factory in Texas and a research lab in Silicon Valley. So the company already has a sizable presence in the U.S. Recent reports also suggest that Ericsson’s U.S. revenues could grow with a possible T-Mobile deal, kicking out Nokia, although T-Mobile stated that it has made “no decision” to end its relationship with the Finnish vendor.
Ericsson's American revenues may appeal to company big-wigs. “The U.S. has become such a big part of their revenue, they may want to move closer to their biggest customers,” said Recon Analytics analyst Daryl Schoolar in a phone conversation with Fierce.
The company may be signaling to the incoming Trump administration that it is “open” to moving to U.S., possibly as way of avoiding the expected tariffs on goods coming into America, AvidThink principal analyst Roy Chua suggested in a conversation with Fierce. “I think [the CEO’s] comments are an indication of openness, whether it’s credible long-term — it’s unclear — there are so many other factors,” he said.
“I don’t think it actually locks them into anything,” Chua stated.
“You’d have to get a lot of people to move, and that’s not easy,” stated Schoolar. He recalled when Sprint and Nextel merged, it was “tough” to get employees to move from D.C. to Kansas, so imagine getting people to move from Stockholm to Dallas, he added.
“You’re not going to be able to go out cycling, you’re not going to be able to go out on your sailboat, you’re not going to have a social safety net. Welcome to Texas!” the analyst joked.
He suggested that the CEO’s comments were more a poke at European Union regulators. “I think they’re doing it more to threaten the E.U.” he said.
Both analysts felt it was possible if unlikely that other foreign vendors would move their headquarters to the U.S. Vendors like Amdocs — out of Israel — and Finnish vendor Nokia could make the move, but such a move is also improbable.
An Ericsson move is unlikely, even if it is feasible, Chua concluded.
Read our reporting on what to expect from the Trump 2.0 administration here.