Ericsson Rids Itself Of Russian Support Operation

Ukraine - Shutterstock - © Mykhaylo Palinchak

Ericsson has ended its software and technical support operation in Russia, after earlier halting sales to the heavily sanctioned nation

Russia’s global tech isolation continues to grow after Ericsson handed over its remaining business operation in the piranha nation.

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 – following Russia’s illegal invasion of Ukraine and resulting sanctions.

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

Ericsson's headquarters in Sweden. Ericsson
Ericsson’s headquarters in Sweden. Ericsson

Russian withdrawal

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 in September Ericsson faced unwelcome headlines after Swedish media outlets reported it was continuing exports to Russia.

Ericsson at the time denied exporting any hardware, but admitted that software and technical support was ongoing.

Customer support

Now on Thursday Ericsson has officially announced that it’s “wholly owned Russian subsidiary has entered into an asset transfer agreement to divest its local customer support business in Russia to a Russian company owned by former operational managers of Ericsson´s Russian subsidiary.”

It said that the transaction includes a transfer of approximately 40 Ericsson employees, and certain assets and contracts related to the business.

The customer support business is a local business engagement that does not involve the export of hardware, software, or related services to mobile operators in Russia.

Going into 2023, Ericsson 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 to fulfill legal, contractual, and administrative requirements.

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).