Ericsson Still Provides Support Services To Russia

Ericsson has acknowledged that it still offers some services to Russia, in response to Swedish media outlets that reported it had continued its exports.

The Swedish telecoms giant said on Friday it is only providing software and technical support to Russian clients and has not sold any telecommunications equipment to mobile operators there since the Ukraine war started, Reuters reported.

It should be noted that in early April Ericsson had said it was suspending all deliveries to customers in Russia, and would suspend its affected business with customers in Russia indefinitely.

Russian withdrawal

That move followed its rival telecom equipment maker Nokia, which said it would completely withdraw from the Russian market before the end of 2022.

However Nokia has since admitted it does limited maintenance of critical networks to fulfill its contractual and humanitarian obligations

In August Ericsson followed up on its April announcement, when it said it would exit the country in the coming months. It recorded a charge of 900 million Swedish crowns ($81 million) and made 400 staff redundant in the country as it wound down its operations there.

Russian media reported at the time that some of Ericsson’s support staff would move to a new firm that would be established by top managers in Russia.

But now Swedish media outlets reported this week that Ericsson was continuing exports to Russia, but the firm denied exporting any hardware, while admitting that software and technical support is ongoing.

Sveriges Radio Ekot reported that Ericsson had applied for 12 permits for exemptions from sanctions from Sweden’s Inspectorate of Strategic Products – and was granted seven.

The sanctions list by the Swedish authority include software and technology linked to telecommunications. It did not immediately respond to Reuters requests for comment.

Ericsson said the permits were for software and technical assistance.

Support services

Following the admission, shares of the company fell 4.6 percent in morning trading, Reuters reported.

“Compliant with the sanctions we provide the software and technical assistance for those products that we have shipped prior to the invasion making it possible to withdraw while fulfilling contractual obligations,” a spokesman was quoted by Reuters as saying.

“When the sanctions were announced we stopped shipments to customers in Russia,” he reportedly said.

“Even though mobile telephony is for civil use, an export license is required mainly because of the advanced encryption technology that is embedded in our products, and this is to applicable for all countries,” the Ericsson spokesman said.

“Ericsson’s products are designed for civil use, not military,” he concluded.

Russian invasion

Nearly all western tech firms (with a few exceptions) have withdrawn from Russia due to its unprovoked aggression in Ukraine.

However Yale University maintains a list that shows some exceptions, and it notes that mainly Chinese tech firms are still trading with Russia.

The Chinese firms still trading with Russia include ANT Group (it has a joint venture with Russian Sovereign Wealth Fund); China Mobile (business as usual); Honor (business as usual); Oppp (business as usual); Semiconductor Manufacturing International Corp (Yale alleges it defies US sanctions by continuing to export to Russia); Tencent (has a major investment in VK); and lastly ZTE (business as usual).

European firms identified include AnyDesk Software (based in Germany, which is still providing services to Russia but not disclosed publicly); Eutelsat (based in France, still providing satellite TV services to Russia); and Philips (based in the Netherlands, and online sales are still available in Russia).

American firms include Cloudflare (which Yale says continues sales and services in Russia); and Match Group (which continues to operate in Russia including Tinder).