Ericsson, the Swedish telecom equipment giant, reported a 74% increase in revenues from the South East Asia, Oceania, and India regions to SEK 13.8 billion ($1.26 billion) in the third quarter ended September, mostly driven by 5G market share gains in India, according to a statement released on Tuesday.

The rise in the Indian markets was sufficient to offset a portion of the significant loss in revenues from the North American market, which saw network sales drop by 60% in the quarter compared to a record quarter in the same time in 2022.

Q3 performance was in line with guidance, with an EBITA margin of 7.3% and an EBITA of SEK 4.7 billion. Group organic sales declined by 10%, with a 16% organic decline in networks partly offset by 5% organic growth in cloud software and services and 11% in enterprise,” said Ericsson president and chief executive officer Börje Ekholm.

Networks organic sales in North America were down by 60% YoY from a record quarter in Q3 2022, due to customers‘ inventory adjustments and a slower deployment pace. Sequentially, network sales declined by -2% in line with previous trends. The decline in North America was partly offset by growth in India as well as some early 5G markets resuming investments,” he added.

India is Ericsson‘s second biggest market in terms of net sales after the United States, but it has increased its share to 15% as of September 2023, up from 4% at the same time in 2022. In the 2023 quarter, China and the United Kingdom both have a 4% share, while Japan has a 3% share.

Ekhholm noted that free cash flow before M&A had decreased to SEK 0.5 billion, primarily due to increased working capital for large deployment projects such as in India, and added that in 2024, the build-out pace in these projects is expected to slow, resulting in a tapering of working capital and free cash flow, to begin gradually approaching the long-term target of 9-12% of net sales.

India’s two largest carriers Reliance Jio and Bharti Airtel have used network gear of providers including Ericsson and Nokia to deploy more than 270,000 5G sites across the country in what is being considered one of the fastest 5G rollouts globally and third largest 5G deployment in the world. The carriers have invested billions into the fast-paced rollout by substantially advancing capex since October last year, however, the pace is likely to moderate from FY25 since both carriers would have completed their pan-India urban 5G coverage.

Ericsson also said that Nunzio Mirtillo, senior vice president and head of market area for South East Asia, Oceania & India, will retire during 2024, and processes to appoint his successor have been initiated.