Ericsson continues to make moves to extricate itself from Russia, the latest being the sale of its customer support business in Russia.
Ericsson, which is holding its Capital Markets Day today, announced that its wholly owned Russian subsidiary entered into an asset transfer agreement with a Russian company owned by former operational managers of Ericsson’s Russian subsidiary.
The transaction includes the transfer of about 40 Ericsson employees, as well as certain assets and contracts related to the business.
Ericsson stated that the customer support business is a local business engagement that doesn’t involve the export of hardware, software or related services to mobile operators in Russia.
Soon after Russia’s invasion of Ukraine on February 24, the GSMA kicked Russian companies out of Mobile World Congress (MWC) in Barcelona, where they had been scheduled to exhibit February 28-March 3 as part of the Russian pavilion.
Around that time, companies like Ericsson announced plans to cut ties in Russia. Ericsson suspended deliveries to customers in Russia and in April, citing recent events and European Union sanctions, it announced that it was suspending business operations in Russia indefinitely.
About 400 Ericsson employees in Russia were notified of layoffs and have been on their way out as operations were discontinued, according to the Swedish company.
Further complicating its exit from Russia are legal proceedings in Moscow by mobile operator Tele2, which accused Ericsson of refusing to honor equipment supply agreements. Tele2 told Reuters last month that most of the undelivered equipment referred to orders made long before sanctions were imposed.
On a webpage about Ericsson’s business in Russia, the company states that it is aware of the legal proceedings initiated by Tele2, but as it’s an ongoing legal matter, “we are unable to comment further at this stage.”
The company also said telecom networks are part of the critical infrastructure in any society and exiting needs to be done responsibly. The Swedish authority granted Ericsson time-limited exemptions from sanctions so that it could deliver technical assistance and software for civilian public telecom networks.
Ericsson said it intends to end all customer engagement in Russia by the end of the year, and going into 2023, it expects to have a small presence in Russia on a local basis. A legal entity owned by Ericsson will continue to be registered to complete the wind-down and fulfill legal, contractual and administrative requirements.