Telefonaktiebolaget LM Ericsson (publ) (ERICB) Earnings Call Transcript & Summary

Welcome all to Ericsson's 2022 Capital Market Day. My name is Peter Nyquist , and I will be the moderator at this event today. It's actually great being back in an in-person event and great being back in the Capital Markets Day. The last one was in 2020, almost 3 years ago. And that was held in Siesta Stockholm, was an only online web broadcasted and Siesta Stockholm. We were here in New York, I guess, the last time in 2018. Just great being back So as you know, Capital Markets Day is all about numbers and plans how to achieve those numbers. This year, CMD is no exception. But the common theme for these number is all that a symbolized the long-term opportunities that we have here in Ericsson. They will shape the future of Ericsson. Today, we will talk about -- or the team will talk about how to execute on these plans and how we do it and how we're going to execute. So who will you meet here today? We will have the first block as you see here on the -- we'll start with Borje Ekholm, who will talk about our strategy execution, and he will be followed by our CTO, Erik Ekudden, who will talk about the technology leadership and what really -- what it actually really means. So after that, we were actually welcome to what you can call them newcomers to Ericsson since the last Capital Market Day. It's George Mulhern originally from Cradlepoint but now heading up the enterprise wireless solutions. And then we will have Rory Read, who is widely from Vonage, but it's today heading up global communication platform. George, who unfortunately cannot be here today, we have recorded him, so we will show that. And Rory will talk about the enterprise business. The last presenter in the first block will be Niklas Heuveldop, Head of Ericsson North America. He will then cover the customer review. We will end the first block with about 20 minutes Q&A. Then we'll have a 15-minute coffee break. We will start the second session around 11:05 Eastern Time. And that will be with Fredrik Jejdling, who is Head of Segment Networks, and he will lay out his strategy And then we have another newcomer, not really a newcomer for Ericsson, but for a new head of the new segment, cloud software and services, Per Narvinger, who will lay out the strategy for his segments. We will end the second block with Carl Mellander, our CFO, who will wrap up the presentation by presenting the numbers supported by all plans that has been presented today. And so around 12:20, we will have the second Q&A session here. And those who actually join online, and I think there are 500 of those. We have about 60 people here in New York. Ken joined the conference but I ask question on the phone. You can find the details on our website, ericsson.com -- and this session, again, will be recorded and with approximately 1 hour after event, it will be available on our website. And again, we will also appreciate giving feedback how we can improve this by the end of the event, you have that sort of survey options on your table. But before handing over to Borje, I would like to say the following about today's presentations. Today's presentation, we will be looking forward-looking statements. Such statements are based on our current expectations and are subject to risks and uncertainties that could materially affect our business and results. Please read our earnings report and our most recent annual report for a better understanding of these risks and uncertainties. And please see the last page in this presentation for further information about forward-looking statements. Any forward-looking statement made during presentation speaks only as of the date of this presentation, and Ericsson's expressly disclaim a duty to provide updates on these forward-looking statements and the estimates and assumptions associated with them. So with that said, I would like to hand over to our CEO, Borje Ekholm.

Yes. So let me get to the start. So it's great to see you all here. My name is Borje Ekholm, CEO of Ericsson since 2017, a big thank you for joining us in person but also online. And I think this is probably the future. It's the hybrid event, hybrid working environment, we have with Ericsson and I'm convinced we're going to see Capital Markets Day in this format as well. But really, what I want to do today is to talk about where we are as a company, but more importantly, where we're heading in the future. We have established a leadership position in mobile networks, and we have really taken the important steps of building an enterprise presence. And now we're actually shaping the industry landscape by becoming a platform company, leveraging the 5G as the most powerful innovation platform we've ever seen. But we will not do this alone. We work with front-runner customers. And together with them, we are driving a paradigm shift in the entire industry, and that is going to define the next stage of growth. And that's the excitement we want to discuss today at this Capital Markets Day. We're a company on the move. We're taking actions to continuously improve our operations to ensure that our people, our customers and our partners around the world understand what's expected, what excellence looks like and where we're heading as a company. More importantly, we fully understand that to be a true industry leader market and technology leadership are not enough. We actually need to be an ethical leader as well. So it's all about how we run the company with the highest standards of integrity and ethics. My view is compliance is actually a competitive advantage. We've done a lot on that journey over the past couple of years, but we want to be honest we have much more to do as well. But after today, I hope you understand and share our excitement in the journey we see ahead. Before I dive in, I want to start by thanking the 100,000-plus people at Ericsson for their hard work and commitment and passion they have shown over the last few years turning around the company and putting us in the position we are in today. So a big thank you to them. Let me shift gear a bit. So you've all been with me since 2017. And when I came in, in 2017, we were in a tough spot. We were losing sales, losing competitiveness. We were losing market share. And more importantly, we were losing money. And we had a history of misconduct. We needed a fundamental reset of our company and of our business, and we took action. So what do we do? We focused the portfolio. We took out significant costs. We increased investments for technology leadership, and we have actually regained technology leadership. So the big shift was actually a shift from -- by reducing non-R&D head count by more than 20,000 -- to be correct, 23,000. And at the same time, we were hiring 5,000 engineers into R&D. So a fundamental shift of our workforce in the company and strong execution led us back to competitive position or a competitive offering, which allowed us to actually regain footprint, regains Sales, we regained technology leadership, and that allowed us to break even the company, but also to reach the goals for '20 and '22 that we said earlier than we expected. Today, we are a clear leader outside of China. As a matter of fact, around half of the traffic of 5G networks actually carried over our networks. And typically, industry consultants, when they look at the industry, they will rank us as a leader in 5G networks. And notably, 16 out of the 20 largest CSPs use Ericsson's 5G core, and we've taken a strong position there as well. You will hear a lot more about technology from Erik, of course, but also Fredrik and Per. I would say the key factor behind our turnaround was to focus on technology and focus on technology leadership, but that was not enough. As I started out saying, to be a true industry leader, it's technology leadership, market leadership but also leadership in how we conduct the business. So we needed to change the culture to make integrity and execution at the core. We saw too many instances of poor behavior, misconduct and many people turning a blind eye. So building a culture of compliance and ethics has been and still is a top priority for me and the whole leadership team at the company. And we started this journey in 2017, and we have done a number of things. But at its foundation, there is a shift in culture and mindset. And that has to be for every one of our people, and it's to instill intelligent decision-making to make sure that we protect the company and our assets. But it's also create ways to continuously speak up to improve our ways of working, but also about our past misconduct. We have driven this through a program that we've been running at Ericsson called Ericsson on the move. As a matter of fact, we started that just weeks before the world went into a lockdown. And when you're in 180 countries, a lockdown actually is meaningful. It was very hard, but we migrated online and been driving it since then. We also put in place a very strong compliance program with strong processes that permeate the company. And that, again, it has to reach out to 100,000-plus people in 180 countries. That is a challenge, requires effort. We also increased our efforts on investigation and took remediation faster. But I would also say there are many more things for us to still do. And I think the most important question that we ask ourselves in the company and actually that everyone should ask, does the program work? Don't get into the fastness of what it actually means, but ask yourself, does it work? That's what we are asking ourselves to make sure that our program is fully institutionalized in the company. And our focus is to respond very fast and very consistent throughout the company on misconduct. We need to make sure the past doesn't repeat itself, and we are committed to cleaning up the past, and we have clean up to do because that's the best way to ensure it cannot happen again. I am committed to getting this right, and I see actually the fundamental cultural reset that we as a company do will improve the way we operate, will lead to longer-term efficiencies as well. So it's truly a competitive edge to have the right culture of ethics and integrity. And we're also under the leadership of our new Chief Legal Officer, Scott Dresser, will completely revamping our approach to global risk management. So we're putting in place a strong central oversight and a streamlined process. So we effectively identify material risks, but also mitigate them or eliminate them. We're also accelerating our efforts to simplify the way we work because we are convinced that will enhance governance, and it will strengthen accountability. So it's again why compliance is a competitive edge. We also continue to cooperate fully with the U.S. authorities, and we take our obligations under the deferred prosecution agreement seriously. And you know that yesterday, we announced an agreement with the DOJ and SEC to extend the term of the company's independent compliance monitor for 1 year until June of '24. I would say this extension is consistent with our commitment to continuous improvement of our ethics and compliance program. So we have started the journey to change our culture, but our ambition is to be a leader in how we drive the business. And to be that, the change has to be fully institutionalized. And this, we believe, will need some extra time, and therefore, it's the right decision to extend the monitorship. With respect to the DPA breaches, we're in active discussions with the U.S. authorities to resolve these matters. And with respect to the investigation report from about [rack] from 2019, we continue to thoroughly investigate the allegations in cooperation with the authorities to understand whether or not the allegations can be substantiated. But now let me shift gears a bit. We are at the epicenter of an extraordinary powerful trend, anything that Can go wireless will go wireless. However, near term, there are some challenges and headwinds as we indicated in last quarter, some of our customers like in North America, are guiding for lower CapEx followed a very fast build-out in the beginning of '22. And this is an adjustment we see that will start during the fourth quarter, and we see similar patterns in other markets. At the same time, we have significant market share gains that were -- that results in growing sales, but that short term might dilute margins a bit. We also see that some customers are doing inventory adjustments, and that's really following the easing of the supply chain. So we -- I think the fair outlook to say is that '23 is a bit uncertain, maybe you can call it choppy. So there are those uncertainties. And I would say that the general economy, the macroeconomic headwinds and the general lower activity level in the economy also affects to some extent, our enterprise segment. So I think we stand in front of a massive uncertainty in '23 and '23 is therefore a bit difficult to predict, which is why we focus our attention on 2024 and longer term at this Capital Market Day. And the reason why we're so comfortable about the outlook, call it, 12 to 18 months out, is that ultimately, the demand for wireless equipment and wireless networks, it's driven by growth in data traffic. And that growth continues. Yes, the growth rate in percent might taper off a bit, but the actual addition to growth or data traffic growth in the networks continues to grow. And that's why we also know that, yes, you can delay investment, but if you need to ensure quality to the enterprises or consumer of the network, you actually need to invest in the network to have that capacity. And that's why we know it's only temporary, and we see it coming back 12 to 18 months out. And if we look longer term, we're planning for a flat RAN market, but there is an underlying very powerful shift going on. And that is that 5G is growing. And why is that important? Well, we are stronger in 5G than we are in previous generations. So that is, in a way, supporting further market share gains for us. And as I said before, 50% of 5G traffic are carried over our networks. So we are still in the early days of the 5G penetration. As a matter of fact, 80% of all base stations need still to be updated to 5G mid-band. We're starting to see new use cases to drive growth. We're also seeing the launch of 5G new markets. So think about India, for example, where India probably will have the strongest digital infrastructure outside of China in just a few months. So very large market growing very fast, and that's a market that we see also can actually balance other front-running markets. And this is why we see the fundamentals of our industry to be very strong, and we believe we can drive and create a lot of value over the next 12, 18 months, but also beyond that. And we see growth beyond the current forecast, and that will come out of new use cases that will leverage the 5G networks to drive traffic. So think about here fixed wireless access. We're already seeing this rolled out in many parts of the world, but it will grow and it will drive a lot of traffic on the network, mission-critical, think about public safety, rail, utilities, et cetera. That's a new use case that's also driving traffic. Beyond these pockets, we see other areas of growth. So think about 5G for indoor. Think about 5G over satellites, think about XR applications. I would say 5G is the first wireless technology that offers applications beyond consumer mobile broadband. It's a true platform for digitalizing society, and therefore, it's going to drive a lot of traffic on the network. Overall, we see the increased demand for broader consumer and enterprise applications will drive further demand actually on network performance. Which is why we see a substantial upside on the 5G investment cycle. And the good thing is that we can capture that upside in the market with very limited additional R&D investments. So our strategy is really to extend leadership in mobile networks and established a focused expansion into enterprises, and that positions us to fully leverage this development. We continue to focus and strengthen our mobile networks through our market-leading RAN and 5G core portfolio. Our strong R&D investments positions us well to further extend technology leadership for cost performance and sustainability. And we're also committed to innovating and drive the world into an open network world. So for example, we're the largest contributor to O-RAN, we drive the alignment between 3GPP and Open RAN, we invest heavily in Cloud RAN, and we do this to ensure long-term competitiveness but also that we are competitive in all different market scenarios. In addition, you see that Cloud RAN, for example, has applicability in the enterprise segment and again, tying our networks part into our focused expansion into enterprises. And here, Erik, but also Fredrik and Per will touch upon this later on during the presentations as well. So cloud software and services is a strategic business for us. Our offerings in this area are fundamental to power today's mobile broadband services, but they're going to be even more important in the future for advanced services such as network slicing, enterprise SLAs as well as XR. So there are a number of key reasons for this segment as being a critical part of our end-to-end offering. But I would also say it links into enterprises as well because it's a fundamental part to create the APIs that will be needed for the global network platform, again, tying our business together. We are a leader in 5G core. We've strengthened our position. We won quite a lot but we have not executed well. So to be clear here, Per will go through this much more in detail. But we have turned around BSS. You know that was a big problem in 2017, but at the same time, profitability in 5G core has deteriorated. And that's one of the key areas for us to turnaround. But the key is we have a very strong market position across the offerings here. So being strategic is important. Making money is more important, and we know how to do that, and Per will come back to that in much more detail. So our mobile networks, that's an attractive business by itself. But with 5G, we can also proliferate into enterprises in a completely new way. And we see this as a multibillion-dollar high-growth, high-margin opportunity. And our strategy is to address this building on the strength of our core mobile business. So I remember this from 2018, the trains, right? They keep on coming. We can check the subway schedule. With 5G, we're in the early stages of, call it, widespread enterprise digitalization. And that's going to create significant additional value for in new areas, such as mining, airports, ports, manufacturing. And that's something Niklas will cover in greater detail as well. Our enterprise strategy focuses on execution in 2 fronts. The first front is enterprise wireless solutions, that includes wireless ONE from Cradlepoint, where we are a clear market leader today and private networks that actually leverages our strong radio and core portfolio. This area will provide a recurring revenue base with a different business model than our core mobile network business. And we continue to invest to develop a strong product portfolio in here, and a dedicated enterprise go-to-market channel, and George will go through this in more detail. The second front of our enterprise business is powered by our acquisition of Vonage. With 5G, network becomes a platform for innovation. In 5G, performance is a premium that consumers and enterprises are willing to pay for. And we have started to do some emerging tests here, for example, together with smartphone in Hong Kong on using specific quality of service offerings to test this market demand. And we see it to be very interesting results. And we see with the new advanced features you get in 5G, call it speed, time-bound latent, it could be network slicing authentication. New differentiated performance services can be created but that requires a new model for monetization. And this is where the network APIs and global network platform come into play. Network APIs will put these capabilities of the network at the fingertips of the global developer community, who, in turn, will create new innovative use cases. So for example, this could be authentication without the password or it could be low latency performance for XR experiences or it could be speed for mobile gaming. These new use cases are based on a differentiated experience or performance in the network. They will offer operators CSPs, additional revenue streams on top of their current subscription models. But to develop those new type of APIs, the network APIs, a deep understanding of the network and the network functionality and what the network can do is required. And that's actually the core capability of Ericsson. But we also recognize that we can develop the APIs, but they are not of any use. If you have developers sitting there who has to contract with 700 operators around the world to get some sort of application at the end. So what we recognized was we needed 2 things: we needed one, a platform to expose the APIs. That's known as the CPaaS platform. And we also needed access to the developer community globally. And with Vonage, we have the building blocks. CPaaS, a leading CPaaS platform but also 1 million-plus developers around the world. So we are now on the journey to give life to the notion that 5G is the biggest innovation platform the world has ever seen, and we are excited to be leading that development. We are at the front runner here. We see that this can create a very attractive return for our shareholders. But equally important, it's actually going to give our customers, the operators better monetization models to drive long-term investments in the network. Rory will talk much more about this vision in detail. So we see an attractive future with a growing market potential. So with our entry into enterprises, our total TAM actually expanded from about SEK 100 billion to SEK 150 billion, and this will provide us with a strong growth tailwind going forward. Our expected TAM or we expect the TAM to really grow by about 7% per year to roughly $190 billion by 2025. We see the wireless networking market to be flattish Prepackaged enterprise solutions are expected to grow significantly. And communication APIs, the current offerings are forecasted to reach about half of the size of the RAN market by 2025. And on top of this, that's where we get really excited. We expect new enterprise and consumer use cases to be created using 5G network APIs, paving the way for a market that's undefined today but where we can lead. So I'm really excited about this future. So there is -- and I hope you leave this thing, there is no lack of opportunities in the markets we target. So as mentioned earlier, 2023 is a bit hard to predict. So we focus on the 2024. And our plans gives us a clear path towards reaching the lower end of our long-term EBITDA target of 15% to 18% by 2024. There are a few couple of actions that we're taking to get us there. So first of all, we're accelerating cost improvements, and we aim to take out about SEK 9 billion or aim to take out more than SEK 9 billion by the end of 2023. And remember, -- in 2017, we took out way more than SEK 10 billion by our focused execution. We also see a large upside in addition to the just recently announced license agreement on IPR. And that's driven by a large number of today unlicensed actors in the market that we can license on the basis of having the 2 largest device vendors license now. We have, over the last few years focused on regaining technology leadership. But now we can shift into improving productivity in R&D. That means that this will allow us to either develop more products in case there is demand or basically let that productivity gain flow to the bottom line if we don't see the market. So this, in combination, what we're doing on the portfolio restructurings as well as commercial improvements can offset the headwinds we see coming, for example, from inflation but also changes in the business mix, making us very comfortable about reaching the targets for 2024. And if you look at segments, you see actually that all segments contribute to our improvement. And you will see and hear a lot more from Carl on both of these 2 areas, and he will go through them in much greater detail. So given the current uncertainty, we live in, we believe it's prudent to -- we need to be prudent in our financial management and really maintain a strong balance sheet. So our first priority is to invest in organic and inorganic opportunities to grow and strengthen our leadership in technology as well as in the market, and that can generate a good return potential. So just to be clear here, our near-term focus is clearly on making sure the integration of Cradlepoint and Vonage are successful. But we will make smaller add-on acquisitions, can be in technology, can be when we have gaps in the go-to-market, but they are going to be small compared to our cash flow. We also know the importance of distribution to shareholders, and we're committed to delivering a stable and strong dividend. Achieving our ambitions can really only be done if we run a sustainable and responsible business. So my priority is in becoming a world-class sustainable company include in short, driving a culture of ethics and integrity and intelligent risk management decision-making that will run our companies in the right way and make sure that we clean up the past. We need to ensure that we have world-class talent in our positions. And that includes actually health and safety of our people. That has to be at the forefront of what we do. So we, for example, when COVID broke out in 2020 by always putting the health and safety of our people first, we were the first to cancel participation in Mobile World Congress. We also see to attract leading -- or the best talent in our company, we need to make a step change in gender diversity, and that clearly needs to happen over the coming few years. I am and the whole company is committed to driving execution to realize net 0 by 2040. It's ambitious. It's demanding, but it's the right thing to do. For 140 years, our founder for 140 years when he founded the company 14 years ago, our founder believed that communication is a basic human need. I share that view. It's even more true today. I would say possibly the biggest divide we see in the world is between the connected and the unconnected, and that divide will grow even bigger in the future. That's why we are committed to working to close the digital divide as much as we can, and we are engaged in a number of initiatives, including our own connector learn, but also UNICEF's Giga initiative. So to summarize, we are on a journey. We're on the move. We're transforming Ericsson into the leading global network platform preparing for exponential innovation. Although we expect some plan for some near-term softness as operators sweat assets, we see investments coming back as capacity is needed, and we're confident in the long-term outlook of our mobile network business. We will continue to drive technology leadership for cost performance and sustainability. We're also laser-focused on turning around our cloud software and services by 2023. The investments and growth we're going to get from the enterprise segment will be very key for our long-term return to shareholders and our long-term growth and profitability. We will invest responsibly to make sure we are technology leaders. We will invest for market leadership as well, but also profitability. So we're going to run a cost-efficient business and capital-efficient business and manage our investments and balance sheet with a strong focus on shareholder returns. A key, and you've heard that many times today, but we are going to be committed to drive a culture with of integrity and ethics that's going to power our company for future success. That's going to include openness. It will include strengthening of our governance positions, it will include improved risk management. And this is how we will be resilient and profitably fulfill our purpose to create connections that make the unimaginable possible. I think these are truly exciting times at Ericsson, and I'm really thrilled that you get the opportunity to hear from the rest of the leadership team today, how confident we are in our outlook and how excited we are about the future. And we are just at the beginning to define the future industry structure and our company. With that, Erik, I think it's your turn.

Thank you so much, Borje, and hello, everyone. So we are now going to dig a little bit deeper into technology, but look at it from the industry perspective. So where are we heading over the coming 5 to 10 years? I don't think there should be any doubt that we are continuing to pursue and be committed to technology leadership in the industry. But what does that really mean? And what does it give us? I'll give you a few examples of that. And the way we've decided to structure this now is really to look at the evolution from today over the coming 5 to 10 years, 5G Advance and 6G. Look at it over these 3 layers of mobile networks, the evolution in mobile networks and our leadership in the mobile industry, then the enterprise opportunity, where 5G is really the new and changing capability that comes into the enterprises, and then I'll come back to the network API and the monetization part. So this is really a journey about more innovation over the coming years. The industry, the mobile industry is not in any way slowing down. We're continuing to innovate, but it's much more about bringing the values of the network to applications to enterprises to developers to allow for monetization of these network capabilities. And I'm going to start at the bottom layer here. I'm going to start with the network itself. And of course, we are used now to 5G in many mature markets. That journey is basically twofold. It's about the capability of the network, handling the gigabytes per second and per month in a more efficient way, but it's also about automation, using AI in everything we do. Every product, every solution, every service is now going through an automation journey. I'll show a few examples of that. Long term, this is about the full open ecosystem, industry scale open RAN and Fredrik will come back to that, but it's also about fulfilling the vision of 60. Ericsson's contribution to this through our very strong commitment to research and open standardization and leadership in the industry in general, working with partners is about providing limitless connectivity in the next era. Limitless meaning everywhere, of course, indoor, outdoor, satellite, all the things that Borje went through, but it's also about self-driving networks, or cognitive networks of the future. But let's then come back a little bit to where we are today, the 5G cycle that we're in right now. And there's no question, most of our discussions with our customers, CTOs and CEOs, it's about how can we build the capability in low bands, in mid-band and high band, because that's exactly where we are now. We have not built enough of 5G in the mid-bands, and Borje touched upon that as well. But there is another reason, another discussion that we're having as well. And that is very much about performance. So how do we show performance. You know there are independent studies, independent government measurements showing Ericsson at the leadership. But rather than showing you just some numbers, I've chosen now to go a little bit more techy. So bear with me. The next slide is going to be lots of graphics. What it is, is really an Asian big city, comparing a traditional, modern, but traditionally built 5G network with that of the latest technology from Eric Ericsson massive MIMO technologies for 5G. So on the right-hand side, you will see the city using massive MIMO 5G massive MIMO. And on the left-hand side, you see a more classical build out with 5G with 4 transmit and 4 receive branches. And to the left, you see that these users in the city, they will experience in the uplink here, maybe a megabit per second, maybe not even that. In some cases, you see it's a gray out area. So they have a very poor performance. Imagine that you are in a business video conference, you're on teams or Zoom or something else, that's not a great experience. If you're using Ericsson's Massive-MIMO technology on the right-hand side, you get 10s, if not 50 to 100 megabit per second in the Uplink undisturbed performance using the latest technology, of course, energy efficient. Fredrik will come back to that, but it's providing the user experience that you need today, and that's really what the best 5G network can offer. So my point here is really that capacity, downlink performance, uplink performance, all these things start to matter again. Differentiated network performance and having the best network performance is becoming more of a competitive advantage for our customers. So operators selecting Ericsson, they get this advantage of the best technology and the best user experience. Where are we on the journey to more immersive, I started to talk about video conferencing? Well, I think the next step is not difficult to predict. We're talking about augmented reality, the thing that you see on the left-hand side. Wouldn't it be nice to walk down Madison Avenue and get some guidance knowing where the stop shops or the restaurants are. And that's very soon going to happen. We're going to have this out and about relatively simple, but still AR experiences powered by 5G. Over the coming 5 to 10 years, we actually see that this will take major steps. We talk about AR taking the lead, maybe around 2025 in an outdoor environment. We talk about all day XR around 2030. May be 1 billion devices in aggregate already by 2030, putting tremendous requirement on the network. High performance is going to be a prerequisite. We're talking about much more uplink performance, much higher capacity, latency that is bounded, all these capabilities that you get already with a 5G network today and can upgrade. So again, Ericsson's technology will be an advantage if you selected to use the latest technology. And actually, this is very likely to be the next paradigm shift. Why should we just continue using smartphones 5, 10 years out, of course, wearables and combinations of these form factors will be the way to go. We know that this is not a near-term opportunity. We are planning for this more for the mid- to long term. But as I said, already within 12, 18 months, we will start to see some more iconic devices in the left scenario here with head-up displays and blending the information in your field of view. So that was a little bit about the performance and the needs. What about the automation journey. Well, here, we are making the investments, ensuring that our customers really can automate as much as possible. And today, energy efficiency and performance is the critical optimization. How can we lower energy consumption. And you see one example here to the right, 14% energy saving with this augmented massive MIMO sleep, 14%. Is that a lot. It's actually a lot if you get that initially. And if you know anything about AI and learning systems, this will just continue to improve over the coming years because the operational data that the network collects and the NOK is using will actually improve this over time. So we continue to get better and better. But you see across the infrastructure, across the services, we're applying leading domain knowledge from our operations of about 1 billion subscribers under management with all the network data we have in the nodes in the RAN and the core. And of course, it will just improve going forward. But it is already delivering gains. We touched upon the importance of leading and driving. We are leading and driving research and standardization when it comes to 5G, 5G advance and 6G. Here you see examples of our contribution to open standardization in 3GPP to the left over an alliance, building the Open RAN systems of the future and also the open source contribution. So our commitment is firm. We believe in collaboration, we believe in openness, but we also believe in leadership. We believe that we have to invest to make sure that we can drive the industry together with our customers and partners, ensuring that the evolution is handling energy efficiency, the performance of these new applications, but also build on the infrastructure that has already been built out. We want to make sure that this becomes an evolution from now until 2030. So back then to the industry development. I already gave you the basics here of mobile broadband and the mobile network evolution. Now I'm adding this next layer, which is really the enterprise networking. And that networking is not your classical local bespoke system. This is not a static system. This is a dynamic system that uses 4G and 5G wherever you are, and George will come back to that in the wireless WAN and dedicated networks. But the next step in that journey is really prepackaged security and why not enterprise networking as a service. You shouldn't have to care about that local network. You're buying networks, just like you buy cloud services as a service. And that's going to happen over the coming 5 to 10 years. And then fixed wireless access, mission-critical networks and the best network for XR are just increasing needs on one on the same infrastructure that operators buy with Ericsson Gear. You start to see the circle to the right here. We actually see that these trends, these changes industry, they help each other. So while we see that networks need to be built out first with mid-band to have the capability to serve both consumers and enterprises. It's also clear that these enterprise users, they will demand more than a typical mobile broadband and consumers do. So it starts to create a virtual virtuous circle here when it comes to more demand on the network in terms of traffic and of course, also more in terms of demand of new capabilities. Borje was into that when it comes to demanding latency, demanding edge capabilities or any other thing that the network can offer. So if we look at this from an end-to-end perspective, from devices to the left, over the network to the cloud to the right, -- this is really an investment that we now have made in 5G. Our R&D investment in 5G, in RAN, in core, in OSS, BSS and exposure that we can now leverage going into not just in mobile broadband, but the fixed wireless access, 300 million fixed wireless access connections by 2028. Mission-critical, a fantastic opportunity where the same 5G technology, very little extra R&D is required to build complete mission-critical networks, a large part of the world's public safety networks that are due for changeout, and they are selecting 5G as a technology platform to do that. And then to the right, you see the prepackaged solutions also very much. They are separate businesses, and they have separate R&D. But from our point of view, we can leverage the knowledge that we built up in our 5G R&D. We can leverage capabilities and components from the 5G systems into the enterprise space, and you will hear more about that from Fredrik and certainly from George as well. So industries are adopting the most advanced technologies. Industries are taking this journey perhaps more rapidly now because they've seen the benefit of using the latest technology than we expected a few years back. But for us, this is incremental opportunities capitalizing and already made R&D investments. Now is this the whole story? No, it can't be because this is still very much about the networks. And all those use cases, firefighters on the mission-critical networks, the gamers on a 5G network or the productivity tools, the teams and the Zooms of the world is running on the network. They are not happy with the network performance that they get today. So we need to introduce what Borje showed earlier. We need to introduce new ways to reach into the network. For years, we've known how to build applications on devices through device APIs. We know how to build applications on the cloud with cloud APIs. We're going to leverage all of that knowledge. Developers and developer environments are there to now inspire the network APIs that we will build on top of all the world's networks as the operators find this the most easy or perhaps the most natural way to get the applications and developers to use the capabilities that the network has already built in. So you can think of that collaboration space where video needs to have higher performance. You would reach in across the network APIs to demand higher performance. And you would do that, perhaps just during the business day or perhaps using one meeting, you would do it dynamically. And that requires knowledge, both of the networks themselves as well as the API layer. And the best starting point for that is actually the knowledge that developers already have in the CPaaS market. It's about a $10 billion market, and that learning from how to really use global capabilities we want to carry over now going forward. So it comes together very much in terms of how the developers, how the applications and users want to consume network resources much the same way as on the device side and the cloud side but now opening up for the network capabilities, the latency, the higher bandwidth, authentication, the security, all of those things. And that, of course, is why it makes perfect sense for us to add the layer on top of the enterprise base here where developers, users applications are no longer satisfied with only hyperscaler or device APIs. They want to reach into the network initially with CPaaS and over time with the global network platform. And we know that this is a strategic development. It will take some time. We see the first proof points already now, but this is going to be a multiyear journey. And now you can start to really see that this is reinforcing capabilities. From the bottom, the capability on the network needs to be there with more differentiated services. It's no longer enough with mobile broadband. On the enterprise side, driving demand for these higher performance services in your home, in your office, in your SME, but of course, also out and about mission-critical, for example, with Fire trucks and police cars and so forth, of course, already need more performance than the mobile broadband network. And then on top of that, the monetization with a global network platform, reinforcing the need for investments in the infrastructure, but also the monetization that will flow through the stack down to the networks, motivating the further investments. So with that, the key takeaways from this session, reinforcing what you heard already from Borje is that our commitment stands firm when it comes to technology leadership, industry leadership in mobile networks. We believe that our technology and standardization investments will continue to position us at the forefront of the industry. We have all intention in the world. In fact, we are committed to continue to lead and drive in the industry with the investments that we are doing, but we are adapting, of course, our R&D in the base business to the flat outlook in the market. But this is also joining about high performance and automation and AI. And as we see this coming live in the network, we are more and more convinced that this is a business opportunity for us, but it's also a very necessary step as we get into even more complex deployment scenarios, even more complex network nodes. So this is a core part of our investments. On top of this, new market, capitalizing on the same, to a large extent, 5G R&D investment that we've already made, but it opens up towards completely new customers, mission-critical with a public safety replacement that I mentioned, but of course, the whole space from dedicated networks, the wireless wide area networks, all of those use cases that require dedicated local networks. And this is a transition that is fitting our technology very well. For the first time in history, we have a technology that is capable enough to serve both consumers and enterprises. That has not been the case before. This is a very new thing that I think we all experienced after not the least the last 2 to 3 years that the technology is really, in many cases, superior even to your fixed access technology. And that's a game changer that's really changing why enterprises go in this direction. And then on top of this, very much about being at the forefront, but working together with our partners, both on the cloud and the device side, working together with our customers, operators are the only entities, the only players in this ecosystem that can unlock this value. They sit on the assets in their networks. The hundreds of networks out there that we are facilitating access to the network capabilities, exposing it through monetizable APIs to developers that are already there today, and that will continue to grow because the new applications require more from the network than they have ever done before. And this is really why we think that this virtuous circle is starting to play out already now. But if you look at this over the coming years, this will just be stronger and stronger force. So I hope you're with me in this relatively complex industry development, but on the other hand, very naturally underpinned by technology development and our own investments and how we are working with partners and working with our own development. So with that, I want to thank you all. And now we're going to hand over to George, if I'm not wrong. And George will be on video. Is that correct, Peter?

Yes.

Okay. Thank you.

Hello, everyone. I apologize that I couldn't be there in person with you, but I do appreciate the opportunity to share a bit about this new Ericsson business area, Enterprise wireless solutions. This will be a very brief overview. So I'm happy to take any follow-up calls which can be arranged through Peter. I do hope to meet you all in person in the not-too-distant future. So here's what I'd like to briefly cover a bit about the why behind the formation of Enterprise Solutions, a bit about the market opportunity that we see and a summary of our offerings and the opportunity in this space, and then we'll wrap it up. It's clear and frankly, the evidence is building rapidly that 5G will play an increasingly important role in enterprise networking. Our business area was formed to enable enterprises to take full advantage of the unique capabilities that 5G brings to help them accelerate their business transformation initiatives. Now the starting point in the formation of this new BA combines Ericsson's 5G leadership in private 5G offering with Cradlepoint's #1 position in the wireless WAN market. Our singular focus and our singular focus on the end customer will be the enterprise. They will be our design center and the sole focus of the solutions that we develop. Now the CSP will continue to be an important partner in reaching the enterprise, but not our only path to them. We have fielded a direct sales force that works hand-in-hand with a vast community of resellers. We will continue to leverage and expand upon Cradlepoint's partner channel model where we have relationships with the world's largest distributors and a broad set of thousands of focused resellers globally. Now our enterprise customers are in the early stages of transforming their business. They realize they must become more agile, more digital and more insight-driven than their competitors if they're going to win. It is going to be a new enterprise and to succeed, they will need a new network. The unique capabilities of 5G will be disruptive to both the wide area network and the local area network, enabling macro mobility, seamless connectivity for large-scale IoT deployments and the ability to support time-sensitive applications on the land side and do it with an agility never before possible because it's wireless. It will also create new challenges for IT security with the amount of IoT devices, at least 10x the number of phones, tablets, et cetera. Enterprise security needs to be adapted to 5G. Since the IoT devices cannot run endpoint agents, the network has to play a key role in securing and policing this new class of devices that roam between the enterprise LAN and public cellular networks. Our NetCloud exchange program aims to solve these problems for our customers and we have released our first set of capabilities on this platform in 2022. We will continue to invest and grow our capabilities in this area. Now as the fastest-scaling mobile generation ever 5G is driving the transition in enterprise networking towards secure and stable wireless solutions, resulting in a multibillion-dollar market, the secure enterprise 5G market. As you can see on this slide, the opportunity for enterprise wireless solutions is at the intersection of SD-WAN security and 5G and estimated to be a $10 billion market by 2024. It's happening now, and we are seeing acceleration in the business. We talk about a single pane of glass because for us and the enterprise to realize the full potential of 5G, it must become fully integrated into the policies and security framework that IT uses to manage its existing infrastructure. We have that single pane of glass with NetCloud manager. But we also live in an API world now, and we can do support integrations with other partners as well. The goal is to make this as simple and as scalable as we can for our enterprise customers. Now we are seeing continued strong growth of Cradlepoint since the acquisition by Ericsson. In fact, some of our highest growth quarters in the history of the company. And we're also seeing -- and we're also just in the early stages of international expansion for the Cradlepoint business, a major growth opportunity ahead of us. We are seeing almost 70% year-over-year growth in our private networks offerings, indicating that there is indeed a growing demand among enterprises for these solutions. Our 5G solutions are being embraced by enterprises today. In our wireless WAN business, our 5G sales are more than 10x what they were in 2021. And as I mentioned earlier, our private 5G sales are growing at almost 70% year-over-year. Our enterprise 5G solutions are already creating real value for our enterprise customers right now today. I don't have time to go through all these use cases, but we can provide details to you on these and many more. The benefit of our enterprise solutions is already being proven. The combination of Ericsson network and 5G technology and solutions with Cradlepoint, wireless WAN and enterprise sales and channel expertise and the programs we have provides the assets to vastly simplify and scale the consumption of these enterprise 5G solutions. As Borje mentioned, Ericsson is shaping the industry landscape and is moving from being just a networking company, leading the development of wireless technologies to becoming a platform company, leveraging 5G is one of the most powerful innovation platforms in decades. So we will be simplifying 5G consumption in enterprises and building differentiation through convergence of 5 key growth vectors that are depicted in this next slide. The 2 left columns are building on our private networking and wireless WAN edge solutions. We are also investing in the 2 columns on the right for 5G optimized security and SD-WAN solutions. And finally, in the center, the opportunity we have as Ericsson to work with our CSP partners to create a more programmable 5G network. We are pursuing new technologies to enable the usage of the CSP network to augment the enterprise network and enable macro-level mobility as well as visibility and governance that is desired by our enterprise customers, unlocking the value for customers and for our CSPs. Also, the 5G device ecosystem is starting to ramp up. And with our strong collaboration with a broad set of device manufacturers as well as chipset vendors, we plan to continue to support the growth of wireless IoT devices to replace wired devices. Our focus is on simplifying the consumption, management and support of integrated secure 5G networks in the enterprise. All of this is built on the foundation of Ericsson's global leading 5G core technology. As I mentioned earlier, for enterprise wireless solutions, we will use and expand the successful Cradlepoint enterprise go-to-market program. It's a multichannel program, including direct sales with large enterprises and a significant and industry-recognized channel program to reach enterprises of all sizes. We currently have strong relationships with the largest and most successful enterprise distributors in the world, who have global programs and access to tens of thousands of various resale partners. Cradlepoint brings over 3,000 channel partners to start, and we're adding 30 or more new partners every month. We also start with over 30,000 existing enterprise customers in our installed base. Our goal is to be where the customer wants to buy, when they want to buy and with a business model that addresses how they want to buy. So our business model, frankly, is a bit of a -- it is a bit different than Ericsson's core business. We have a subscription model, which is not only how many enterprises want to buy today, but also improves our cash flow predictability and margins as a business. A Cradlepoint subscription package includes software and hardware as well as support and warranty. Subscriptions are sold in 1-, 3- and 5-year packages with all the cash paid upfront. Our average term is 3 years, and revenue is recognized across that 3-year period. This provides us with a substantial deferred revenue position that flows through the P&L over time. It's a tremendous value for our customers as well. All feature upgrades during their subscription period are provided at no additional charge. After that the first subscription period ends, we provide renewals for the software support and warranty. These renewals are higher margin because there's no hardware included. So as we grow and our renewals grow, our margins will continue to improve as our share of revenues from software will increase over time. The subscription model, together with the go-to-market model that was acquired through Cradlepoint means we will evaluate Ericsson's enterprise businesses differently compared to Ericsson's core business, in turn, impacting how we assess our value creation in the enterprise segment going forward. So that wraps up what I wanted to share today. I look forward to talking with you more in the future. And thank you for your time today. Now back to you in New York.

George can be here in person. That was the first part of the enterprise story. Now let's move into the second part. And here is the second new comer to Ericsson. I've been with the company for a couple of months now. Rory Read, heading up Vonage and also heading up the global -- or the global communication platform for Ericsson so please.

Thank you, everyone, and it's great to be here today in New York and around the world. I'm going to talk a little bit about our positive work that we've been doing in Vonage and how we're going to fit into Ericsson's journey to become a platform company. This is a powerful and positive story and it's pretty exciting. But before I do it, I have to share just a little bit of personal news that occurred during the earlier presentation. My daughter was defending her PhD in engineering at the University Adembra this morning, and it went very well, and she called me. So congratulations on that, pretty exciting -- so I've been here for about 4.5 months. And during this time, it's pretty exciting to spend time with Ericsson's customers, the CSPs to understand their energy and passion around what we can do around APIs, to build a platform together to create this next generation of capability that's going to unlock business capability around the world. It's going to change the way companies engage with their customers, their team members and drive new ways to monetize and drive the business. So if we move to the next slide, I'll give you a little bit of an overview on Vonage so that you have a basis of the foundation because I'm new. I'm new to the team and new to you. We'll talk about the market opportunity. It's big. It's healthy. It's growing. Sure. There's macro wind pressure in the short term. It's putting pressure in every business. But the long term and midterm is up and to the right. There's clear great opportunity. Bore said it at the beginning, you should leave this meeting today with an understanding that there is a big opportunity over the next 3, 5, 7, 10 years and to create the platform that uses the network, the powerful 5G capabilities to change the use cases and change the way applications and workflows are done is going to potentially change the world. I'll talk about that powerful combination, and then I'll give you a glimpse into where we're going on GMP. Let's go to the first slide. So Vonage has been around for what, years, 20 years. originally as a voice over IP company. It's about $1.4 billion in revenue, about 2,300 team members around the world. And over this period, you can see us making a strategic pivot from about 7 years ago with a series of acquisitions, small and medium acquisitions around the CPaaS, UCaaS and Contact Center as a Service space. These are the foundations that were able to us to move from this originally voice over IP company to over 80% of our revenues today are generated through cloud services. that's the foundation of where we want to go to. And if we go to the next slide, you can see that the market opportunity here is huge. This is a big market across Unified Communications as a Service. This is where we -- you probably go into -- in the U.S., you might go into a large piece of vendor. You might go into a large coffee shop. They use our UCaaS capabilities to do at each of their stores. This is a foundation. It's a good business. It's very profitable. And remember, there's about 450 million seats that are on metal today that still need about 10% or 15% have moved to the cloud. So there's a huge opportunity. Contact center is also a big opportunity. That contact center as a service, growing very well. And then on top of it, the CPaaS, the CPaaS are the APIs that get embedded into all of the workflows and applications across all industries around the planet. That's fundamentally changing how people introduce technology. And remember, I've been in the technology space 30 -- well, almost 40 years. And in that time, I've seen many switches in terms of technology. In terms of this business, it's going to be $73 billion TAM by 2025 and look to the side of the chart. You can see Omdia, Force, Frost, Sullivan and IDC, all recognizing Vonages, technologies and capabilities as a leadership. Now if we move to the next slide, this is a really important concept. I've been in the technology space a long time. Technology comes in waves, and it's built on top of each other. What we're seeing today and why this concept of Vericon as a platform company is so powerful is that these sets of technology around mobility, the cloud, programmable APIs are all converging on enabling technology, the powerful 5G networks. These technologies have been around for years. But because of 5G, 4G and now into 5G, these experience around multimodal communications to your handset is really possible. And it drives and it's successful and every day. There's billing in smartphones across the planet. This is fundamental. And what we're going to see is the movement from the initial sets of APIs, driving a set of transactions, notifications like your packages arriving or you're playing is late. Why is that an important concept because what those application developers around the world with our strong ecosystem, they're able to use these APIs and embed them into their applications and then leverage the infrastructure of the CSPs, over 800 carriers around the world. We can deliver voice, video, messaging any kind of communication to anyone basically on the planet. These notifications are now beginning to move into 2-way conversations. So you get a notification that you're playing is late. You might get it this afternoon. What's going to happen is they're going to move in a direction that you'll get an opportunity at a video and you'll engage with an agent and maybe you'll move to a different plane or you might get a video to show you exactly where to move from this terminal to the next terminal. You're going to see this 2-way communication, but where it's ultimately going is this idea of a ubiquitous 360-degree engagement across all vectors of engagement. -- engagement around discovery of the product, commerce around the product, service, support. And that 360 degree are going to move the physical and digital experience together. Say I like the sport coat. I see it on the website at, I don't know, Nordstroms. I go to the Nordstrom's website. My Avatar tries it on. My avatar is better looking than be, and it looks good on them. I think, geez, I should go to the store. I connect with the store. I tell I'm going to be in a Tuesday. It's down over on Madison Avenue. I come over. They know me. They know what I bought, they know the experience. All of these experiences are going to come together, and that's a powerful change. And it's not a question if, it's only a question of when. It's going to be in every vertical, every industry, every company and they're going to drive it across their business. This is because of 5G capabilities that have opened up this opportunity. And it's going to emerge across communications as a UC, CC and APIs. We have all the pieces together just as Ericsson has put the pieces together to drive this platform discussion. Let's go to the next slide. This is that powerful combination. We've got the global developer ecosystem. Many of our largest customers, like a huge rideshare, you're probably going to use them later today. They started as just a single developer coming to our website, and it's grown into a large managed account -- we have a large enterprise customer base, 120,000 businesses around the world. And this easy-to-use API platform is going to be the foundation that we can bring to the CSPs across the planet. And those discussions that we're having right now with them over my first half, 4.5 months have been nothing short of amazing. The strategic level of the discussion, their interest in this space, not only in Ericsson's base technology, but what we can do together is driving a truly different relationship with that set of customers. And they're the most important customers in this system. And then you combine it with this 5G platform that's going to democratize this capability of low latency, improved performance, improved security, their R&D scale and size. It's incredible. 26,000 developers I have never been -- I have 40 years, IBM, Lenovo, AMD, Dell, Vonage. I've never been in a company where they had 40% to 50% market share. That's pretty darn good. And that's a good base to work from. And the technology prowess in this company, it's powerful. And this gives us the exposure. We're going to use this to drive our current business up. We're also going to introduce the opportunities to resell our CPaaS to these new routes through the CSP. We're going to use this to also introduce the opportunity to resell our UC and CC business, highly profitable, great margins. Next slide. But it's this longer-term vision that want you to get their heads around. We built, as I showed you in the beginning, an API-based infrastructure with UC and CC capability on top of it. What you're going to see is we're going to begin to expose the network capabilities in partnerships with the CSPs to create a set of new APIs, and we're going to leverage our existing CPaaS infrastructure to drive that forward. And that's a powerful concept. Then we're going to use the network and -- not the network, the developer ecosystem that we've already created and expanded into a whole new set of capabilities, and we're going to create a new set of use cases. So if we go to the next slide, you're going to see opportunities to use this next set of capabilities in higher resolution lower latency, better performance, higher security, ideas around network slicing, smart manufacturing. The idea of remote medical procedures. We have huge Teladoc relationships already with our video APIs with our messaging APIs. But there is where the opportunity is to open up a whole different set of revenue opportunities, holographic communications and smart driving. I can't wait for the opportunity. I kind of lift up the steering wheel and let the car drive itself. It will happen in our lifetime. -- no question. And it will be based on APIs and on network technology. That's only going to introduce more TAM into the opportunity in front of us. The winners and losers aren't set here. The next 3, 5, 7 years will determine who wins, but we're in a unique position where we can capture this because of the combination that you saw from Borje, and George, we have the piece parts all coming together with a vision for the future. We can win today and improve our profitability and grow our current businesses, but we can also capture the future. That's the idea behind the 5G platform company as well as the idea of adding enterprise into this powerful network juggernaut. When we go to the final slide, what I wanted to leave you with, we're in the right place at the right time. This is happening. I've seen this across my career many times as these technologies come together, the opportunities are here now, and we can capture it around this new and exciting set of 5G network network-based APIs as well as grow our existing business. Our customer base is right. We've got an enterprise structure and business structure with 120,000 customers. We have the ecosystem around the developers and know how to develop that relationship and with the investment and the support from Ericsson well, Erik as well. But Ericsson, we have an opportunity while the industry is in a disruptive period. Many of our competitors are in a challenged state. Now is the time to put the pressure to them and go after them. We use these disruptions to go invest in the product to differentiate our future to capture that opportunity. And finally, we want leadership. This is a company with a history of leadership, and we want to use that leadership to introduce this next-generation set of APIs that will enable all new use cases -- this is an exciting time, a powerful time. And I can't wait to get at it. The first 4.5 months have been a lot of fun, but wait until you see what comes next. I appreciate the time this at this morning. I can't tell you how I'm site I about my youngest child, my daughters, PhD, fabulous to be you were here. And now I'll pass it to Niklas. I'm going to pass it to Niklas now.

Thanks, Peter. Thank you, Rory. Well, great to be with you this morning in person in my hometown, and of course, all of you joining us online. Thank you for that. Funny detail, I guess, my daughter also studies in Edinburgh, but she's just getting started, and she doesn't cause you text different generation, I guess. And I have the great privilege this morning to walk you through the customer perspective on how they look at the market, the business fundamentals I will try to walk you through some very specific examples on how front runners are starting to see some interesting new monetization opportunities. And then I'll try to bring that together in terms of an outlook, what does that mean as they make their investment decisions going forward. As I do that, I will also try to impress upon you why our customers are actually really excited about the story that George and Rory just laid out to you. Why does it matter? What -- how do these capabilities actually matter also for our service provider customers? And at the end of the day, how that will accelerate our networking business that Fredrik and Per will come back to. So here we go. Yes. 5G is being deployed a lot faster than 4G ever was. We're still 2 years ahead of schedule in terms of countries lighting up 5G. However, and that is an important distinction. There is not a lot of countries that have reached a meaningful nationwide coverage in the medium to high bands, which is where you get to the more extreme performances. And those of you that are into details, it's not a typo. We have separated here 75% plus. And the next category actually doesn't get to 75%, it's 10% to 50%. There is only 2 countries that are kind of in between 50% to 75%. That's why we wanted to impress upon you that is actually to Borje's earlier point also 80% of the 4G footprint out there is still to be upgraded to 5G. So we have a couple of front-runner markets, and then there is a lot more build to happen over the next coming years. I don't have to educate you on the headwinds that we're facing. There are the usual aspects. We have inflation. We have the energy crisis primarily in Europe now, of course, very, very pressing and then a geopolitical tension. What I would like to discuss are the tailwinds and what -- and how that impacts the business fundamentals for our customers. So we just did a consumer lab study that confirms that consumers put their mobile services above most other services and bills that they pay on a monthly basis. You do not compromise your mobile services. I mean, the smartphone is kind of your remote control of your life, and that comes very high up on your agenda. We see about 1 billion 5G subscribers by the end of this year. But you talked about the data traffic growth. Yes, it's tempering up somewhere, but it's still at 30%, 40% growth per year. That's 4x over the next coming 5 years. So significant data growth in the network still today, climate action, top of mind for everybody, not the least because our customers pay about $20 billion a year on the utility bills, but there is also the exponential road map to climate change all of our major customers are committed to net 0 as well and 5G is the way to get there faster, not just for our customers. Altogether, we actually only account for 1.4% of global CO2 emissions. But our technology can transform industries and have a much greater impact because the extended ecosystem, 15% to 20% if you bring in 5G AI to transform industry. So there is a massive opportunity for our industry to contribute to climate action. Borje mentioned it. Erik also talked about it. We see the public sector, first responders, even the defense sector now getting intrigued by 5G because of the unique capabilities because of the security, reliability and integrity that the 5G network offers, we see many public instances now considering 5G as opposed to bespoke niche technologies. We see them getting on mainstream 5G. FirstNet in the U.S., great example, Department of Defense working with 5G. So there's a lot of examples where the public sector is now considering 5G for critical networks across the globe. And then last but not least, digital divide. The pandemic exposed a pretty pressing reality even in the U.S. where we have a significant challenge with the digital divide. U.S. government has allocated $100 billion to a broadband initiatives. The European Commission, EUR 188 billion set aside to driving the closure of the digital divide. So there is a lot of government commitments Berry also referenced digital India, which is probably going to be the single largest and most aggressive plan out there to create a digital economy in India. So significant government investments and actions to make this happen. If I look at the business opportunities and forgive me for organizing it into 3 buckets or growth vectors, we're trying to simplify it a little bit, but you're probably all familiar with the term enhanced mobile broadband, fixed wireless. And then of course, we're comeback I'll come back and talk a little bit about the enterprise opportunity, where we now see significant and encouraging first examples of success. So if I start with enhanced mobile broadband. Most of our customers, if you talk to them, will tell you that customer experience, cost reductions and of course, growth, not -- are their top 3 priorities. So if nothing else in its most basic form, the sheer capacity and energy improvements, 10x in capacity, over 30% in energy efficiencies that 5G will give you drives the investments for our front-runner customers. On top of that, and we see that in a number of front-runner markets, I've called out U.S., China and South Korea on this slide here, we have consistently, over the last 4 quarters, observed 2.5% to 5.5% in revenue growth. So frontrunners that have the nationwide coverage that they're offering a differentiated experience are also seeing an uptick on their profits. Now it's early days. It's an early indication but you will have to agree that, that is an encouraging sign. Eric and Borje also talked about XR. XR is a really demanding use case for the networks. It puts extreme requirements on network performance. You will not have a great experience on an iconic XR device if the connectivity is best effort, choppy intermittent. Those kind of use cases that we're playing around with and where we will see first iconic devices come into the market here already within the next 12 to 18 months will put more extreme demands on the networks, which in turn will drive more data growth beyond the ForEx I just talked about. And I don't think it's unreasonable to assume that our customers will find a way to serve up these new devices with additional monetization opportunities. So that's an atom broadband. Fixed wireless. Yes, we've talked about that for a while. There's probably 100 million subscribers out there. What's the excitement now. Well, with 5G, we see our customers now being able to offer speed tiers and differentiate. We see governments like I just mentioned, seeing an opportunity to actually address the rural divide with an offering that is competitive on par with fiber and offers a great customer experience. 5G is the way to do it. Our customers in the U.S. have already seen 3 million 5G fixed wireless subscribers on their networks, and they expect to grow that to 11 -- 13 million over the next coming years. Australia million subscribers, they have clear line of sight to get into 3. India, I mentioned digital India. One of our customers Reliance India will contribute in a big way. They see a potential to get 100 million subscribers in India. 40% of the 5G fixed wireless deployments in the last 12 months are by customers in emerging markets. It is their way to get to mobile broadband, 300 million subscribers worldwide by 2028, $68 million in incremental revenues, give or take, 8% according to strategic analytics in terms of revenue impact for our customers on average globally. This significant opportunity in the U.S. alone over the last -- in the last quarter close to 95% of all net fixed broadband additions or 5G, fixed wireless access close to 100%. The growth is driven by 5G in how you expand broadband connectivity. Now a little bit more complex story and slide, the enterprise and public sector. We have spent 5 years as an industry trying to figure out how our technology can enable industry and public sector to transform processes and to transform their ways of working. We have worked across 25 countries, 20 operator customers -- over 20 operator customers and over 100 industry partners to get our head around that. Yes, there is a lot of proof of concepts. There's a lot of early experimentation but there is also a clear line of sight to the value that 5G can drive across multiple industry sectors. Couple of proof points. So we already now in the last 12 months have seen a 70% growth in our private networks business, over 200 paying enterprise wireless customers. That is evidence that industry believes that there is true value, transformative value in 5G networks. There is good growth. In emerging markets, it's even more significant. And I'm going to point you to a study that we did with analysts Mason that talks about the specific opportunity of 5G in transforming industries in emerging markets. I won't spend a lot of time on that now, but there is a significant opportunity also in emerging markets. We have paid a lot more attention to our front runners over the last years. So there is exciting opportunities also in emerging markets. Last but not least, and this is where it gets interesting. Why do we continue talking about it? Why are those tens of billions of dollars not visible on our customers' P&L yet? It's the industrialization, the ecosystem that is lagging. It takes time for devices to proliferate get in at the right price points. The developer ecosystem that Rory talked about to get excited about this amazing 5G networking capabilities that this innovation platform will now offer until we can get those capabilities exposed to developers in an open, intuitive, programmable way, this will not take off. So we have taken on the big responsibility as Ericsson, in engaging the ecosystem and trying to drive industrialization across the ecosystem so that we can replicate proof of concepts, scale them to industrial grade solution and then see this take off in a big way. I'll give you 2 examples, recent examples that I think give you an idea of why industry is excited and of course, I'm very excited about this opportunity. This is a joint project with British Telecom and Belfast Harbor. We haven't been working with them for a long time on this project. So this is maybe 8 different use cases that have gotten them really excited that generate significant value. Maintenance cost is a big deal when you port operation. And by working with asset condition monitoring across your various devices, you can detect micro vibrations, heat other fingerprints that will indicate that a certain device needs maintenance. So that you don't service devices when they don't need the maintenance but you'll also get to them before they break, which will be catastrophic and then impacting the operation, of course, installation surveillance, CCTV cameras, 56% reduction in the cost of operating and maintaining those devices. That's a big deal because CCTV devices, when you can plug them on a 5G network, you don't need to wait to run long fiber deployments to get the cameras installed. You can put them on your crew on the ground. So this is a big ticket item for Belfast Harbor. They are very excited about the fact that they can reduce the cost and increase the flexibility of deploying these devices, 50% reduced time spent on inspection by leveraging drones. You can imagine a port, there's a lot of big goods moving around that you need to keep an eye on with drones and with 5G technology, you can keep an eye on them and it reduces the time spent by 50%. And then there is a bunch of other use cases, safety and sustainability related 14 that they have identified that then make for a significant triple bottom line impact. This is a use case we will continue working on, and we hope also to be able to share some of the financial impact here over the next coming months. This is a great use case. And then we should probably talk about ourselves. This is an example that is very close to my heart. I was in our factory in Louisville, Texas only 2 weeks ago with one of our large customers. looking at how we have transformed our own operations by using our own technology. And I'm not going to spend a lot of time on this slide, but reduced material handling by 65%, lead time reduction by 70% and planned downtime down by 50%, productivity per employee up by 2.2x. And we have reduced our energy footprint by 24%, water consumption by 75%. This is a reference case that the World Economic Forum has recognized as a lighthouse factory of the future. So another use case where we ourselves are experiencing the significant transformative impact of our own technologies. So if I then shift gears, the market outlook. We Borje referenced it, we are seeing a slowdown in North America, coming off record investment levels now over the last 2 years. The Europe then holds steady over the next coming period. That's important. That's a very sizable market for us. And in India, we see significant acceleration with the recent wins. So all in all, we have a flattish outlook for the next coming years, but there is a shift in the mix. We also see some of our front runners that have been building out at a very high pace as supply chain stabilizes globally, adjusting the inventory levels. Just like we're doing, and Fredrik will talk about that. We're working in close collaboration with our customers to rebalance inventory levels in the supply chain across the next coming quarters. Underneath that, mobile data growth is healthy cost and energy efficiencies, drive investments across the world. And on top of that, we have exciting new monetization opportunities in the broadband case in fixed wireless and then in the industry and public sector transformation. In closing out, most of the 5G build still remains. That's also true for the U.S. The business fundamentals are solid. Early successes in Hanover broadband fixed line is enterprise. And again, in the outlook shift between North America and India, which holds us steady at the corporate level. With that, Q&A.

if you stay here, Niklas, and I will also welcome back on stage Rory Borje and Erik. So we'll start -- and I will try now to see if that works, alternate between the venue here as well as those online. So let's start here with the first question in the venue here in New York. I'll start with Andreas here on the front here. So please.

Andrea Sigilon Danske Bank. One question for Borje. You said that 2023 will be choppy. Can you explain how you see 2024, not also be choppy and uncertain. And secondly, for Rory, you mentioned a great opportunity in growth, but this is an industry maybe not known for its profitability. Can you explain how you will make this growth profitable and cash flow generated?

I can start with the outlook question then. So the reason why we say it's you have always the opportunity for our customers to sweat assets in the short term. You can always wait a couple of months to buy new capacity. But you can't wait forever because then you're actually the consumer experience or the end user experience to the enterprise or consumers will suffer. And that's why when we look at this, we see a very fundamental trend of the growing traffic that's happening in the network. It's the users are consuming more and more data every day. happens around the world varies a little bit by country, but it's kind of a very stable trend of growing data consumption. Ultimately, that will require network investments. And that's why we say 12 to 18 months out, we feel much more comfortable about the stability of the industry that all of those choppiness will have been worked through. In addition, I would add that and Niklas touched on that also gives you a cost advantage, or I don't know if it was you as well, but it gives you a clear production cost advantage. So there is a need as data grows here to actually buy both capacity as well as 5G capacity. And that's why we're very comfortable about the long-term outlook, but not the short term is more comp.

So on the second question, when you look at our portfolio, when we were a public company just recently, we had driven our business to overall profitability. But we manage the profitability at a 1 or 2 point level so that we could continue to invest in the software to capture the growth opportunity. When we combine the total portfolio of Vonage, residential IP, UCaaS, CCaaS, contact center and API, it's overall accretive and profitable to the business. So we're running a total portfolio. And I think what's happening is the market is moving towards this API drive. And as we move and introduce these new next-generation use cases, they all have higher margin levels. So today, we're already profitable. We're also accretive to the business today in terms of enterprise. And with the drive forward in that portfolio, I expect that to continue.

Thank you,. And I will try to see if it works here, I will move out online. And Victor, can you see to that? I'll get the first question from anyone in the online. So I think the first question here will come from Aleksander Peterc, on Societe.

Can you hear me all right?

Alexander, welcome to New York.

Yes, I just have 2 questions. One is if you could be more precise on the impact of inventory adjustments you see now by customers in advanced markets. That looks to be like a new draft. So if you could be a little bit more precise on how long this will last -- is it an H1 affair or all of 2022, that's going to be affected by that? And then the second question is really on.

Alex, we hear you fairly badly. Can you say it's the cycle you're trying to inventory adjustment.

Yes, exactly. Yes. And then I have a quick follow-up. Yes.

Okay. So we see, as I mentioned, for our customers that have been running at a very high investment rate for an extended period, they have been working with us and also jointly managing the supply uncertainty by building extra inventory. And as we now transition to a more stable supply chain environment, they will be adjusting the inventories. I think that is a matter of a couple of quarters to your question. I think by the first half, we will have balance that. By the end of the first half, we will balance that out. Underlying the build continues, as I mentioned. So this is more a right way for us to work with our customers and find a better balance in our respective supply chains. Fredrik will take about what we're doing. And this is, of course, us working with our customers now to make sure we get to the right supply chain end-to-end.

Thanks, Niklas. You had a second question as well, right?

Yes, just a quick follow-up. It was really on what happened in 5G network core profitability. I think you mentioned in the intro that had deteriorated and that has put back the recovery in digital services. So I'm just wondering what's happening here in competitive tone Nokia in this space. And I would expect you guys to charge what you need to be profitable here. So what has changed in this business to make it unprofitable for you guys?

I'm terribly sorry. I did not hear that.

It's on the core side, right? You're asking question maybe -- but we will have a perception... was it a core then I think we should save it for.

Per maybe.

But we will have a complete.

Was it a core then I think we should save it for per.

We will say that question for Per later on.

Yes, I have sent an e-mail, and we'll answer it later.

Okay. Thanks, Alexander. We'll move back to the.

Andrew, you need to be on a better cell phone network.

Simon Leopold with Raymond James. I don't think there's much debate about the trends in North America or, for that matter, the opportunities in India. But I would like you to dig into and unpack the rest of the world, in particular, Europe, and one of the aspects, I think you alluded to that I'm struggling with is it seems as if increasing cost of power may cause European operators to spend less money is one argument, whereas I also hear, there's motivation to upgrade because new equipment will consume less power. What are you assuming in your models for the next 2 years in terms of Europe and basically regions besides North America and India?

Yes. I mean you're absolutely right that Europe will need 5G as well. It will be a consumer demand ultimately and enterprise demand that will drive that buildout. And the reason you saw this in 4G, Europe got 4G as well. They got it later than other regions. So that led to all jobs created in other regions. So it's more a question of where job creation will be, the build-out will happen. And that's why I'm, again, much more comfortable when I look at Europe from a longer-term perspective, it will actually be building out 5G as well. It will happen. However, they are pressured right now the European operators. There are pressure for a number of reasons. One is clearly energy. That's one thing, but also the whole industry structure. I mean, the U.S., call it, 3.5 operators, India, I guess, it's about 3. If you look at China, you can argue, it's maybe 2 or 3 depending on how you look at it, Korea, 2 or 3. So when you look at some sizable markets, it's a consolidated market structure. We think, and I think that needs to happen in Europe as well in order to reach, so call it, return on capital employed that actually our customers need. So I much rather have fewer customers and healthier. So the way we look at Europe is actually that it will be -- I'm not going to say time-wise, but over time, the networks will be built out and therefore, it will be a quite sizable market for us. Short term, it's a bit slower. That's quite clearly the case. On the other hand, we have gained market share in Europe. So we'll strengthen our position. And if you look at our numbers, we've actually we actually performed very well in Europe, even in an adverse environment. So Europe, we're relatively positive on but more from our perspective as a network provider than we are from a political perspective about job creation because that's where I think they suffer. If you look then emerging markets, and I think that's maybe it's the wrong label to put on 5G. As a matter of fact, the countries which are less fortunate in a way, they are the fastest to adopt this technology because it allowed them to digitalize the country. So think India here. India is a massive opportunity. Digital India is gaining traction. It would be a formidable competitor on the World sea, but you see other countries in Asia doing the same thing. I think Malaysia. They're building out on 5G network. It will be -- they will have one of the stronger digital infrastructures. You see that in country after country, you see it in Latin America as well where you can use 5G in a way to jump a generation. So we -- again, the near-term outlook, a bit uncertain. -- but we're very comfortable about the 2024, '25, '26, and that we're going to see the build-out happening in all of these regions.

Thanks, Borje. We will try again to move back online and hopefully with a better connection here, so we can hear the question. So the next question is from I think -- can you repeat from Care. Can you hear us, Predrag?

I can hear you loud and clear. Can you hear me?

Yes. Perfect. Please Super.

So I have a question on the enterprise and CPaaS opportunity. You talked about several sales channels. So I'm thinking where you see the main one. Is it the CSPs, the partner network directly to the customers. So I think one you've had historically more direct to the customers. some larger, some smaller, where you have a more scalable approach where you mentioned some finding their way through your website, Cradle Point, which has used resellers, but not that much CSPs, and they have Ericsson, which is going through normally. And then in the sales process, what is your role if you take a larger project in terms of planning, budgeting, implementation, upgrading versus what the CSPs would be doing. So big theoretical type of question.

Yes. That's a very straightforward. Thank you for the question. From a CPaaS perspective, our Vonage CPaaS will be the largest component of the driver of revenue for the next several years. There's no question about that. That's where the base and the majority of the business will come from us selling to enterprises and businesses, no question about that. It's a high-growth space. It's going to continue to grow. Where we're going to see opportunities there, we'll continue to leverage our partner channels and our direct channels, obviously, the developing ecosystem. That's why in the section where I talked about CPaaS reselling, I talked about our CPaaS revenue synergy concept and also UCC. We see opportunities to leverage that and to create some better relationships with our carriers down underneath the CSPs to get better pricing, improve margin and also allow us to grow it. That's foundation, particularly over the next 3, 4 years, that will be the largest part of the drive. As you move into GMP and network-based APIs, you'll start to see the beginning of those even next year, early next year. And you'll see us introduce those concepts that we're working together with Ericsson R&D and with the CSPs that will build out over a 2-, 3-, 4-year period and introduce a new level of TAM. But the base majority of our business will be from our traditional CPaaS business as the foundation particularly over the next 3, 5 years, we'll build on top of that additional TAM because of GMP, and that's how we're going to drive the business. Eric, anything you want to add?

Maybe a comment on just enterprise-wide solutions. So there is -- first of all, it's worth to remember that every Cradlepoint sales comes with a subscription with the SIM card. So that's why kind of -- it goes together, it generates immediate revenues for the CSPs as well. But the CSP is a very important channel for us. So what we do is a win-win. When we can go to market with our dedicated networks or Cradlepoint, we can actually use the CSP relationships as a win-win where they generate revenues, and we do. So they are a key partner of ours there.

Thanks, Barry. I will now take the 2 coming questions here in New York. We'll start with Frank here. Please Frank.

It's Frank from DNB here. So a question about the cost reductions, the $9 billion that you are planning. Could you give us some more color on the timing aspects here through 2023 whether or not you've already started executing perhaps on that, whether it will be more back-end loaded or front loaded, the linearity of it, basically? And also what kind of focus you will have when you did this present the original cost reduction plan, as we mentioned in 2017, it was very much skewed actually and R&D was prioritized and so on. If you could give us some more details on variable cost cut and so on that will be great.

So this -- to break it down very simply, about 2/3 comes in cost of goods sold. So it's typically service delivery, et cetera. The other comes out of SG&A. So that's where we are saving. Then on R&D, we are and Fredrik will talk much more about this and Per as well. Our key driver is to maintain technology leadership. We are strong believers that only by lead, you can generate excess returns. That's the way we create excess returns in mobile network business, but also in our enterprise side. So we are always going to push ahead. At the same time, we're starting -- I think we made sure that we were going to catch up -- so you can argue, we sacrificed a bit short-term productivity in there. So what we're doing now is putting more emphasis on productivity. And we are seeing that we can gain productivity over time in R&D as well. Then the question is how do we use that? Do we use that for products that can generate sales? Or do we let it slip to the bottom line, that's the next level of question that we're -- it depends on how the market shapes up and how the market opportunities look like. But for us, technology leadership, that's the key driver. That's not where we're here to save on [ Persia ]. But of course, if productivity gives us that we're going to capture that as well. So we feel very good about the cost reduction potential then we're saying it's going to have full effect by year-end of next year. There are a number of things going on when you do these things. And we know from experience, you start to take out some costs can be consultants, ARPs, et cetera, that works relatively fast. But then it takes a bit longer with some other parts. So I'm not going to give you an exact guidance over the year, but you can understand, if you look at the last time that is a bit more tilted towards the back end and the front end because the really big savings typically don't come out until you take the structural cost out.

Thanks, Frank. We'll move to Terence over here before break.

Terence Tsui from Morgan Stanley. Just a question around the improved customer experience and whether that is translating into greater pricing power for Ericsson, please. Perhaps can you share with us any details about the contracts that have been recently reviewed -- renewed? How many are coming with higher prices or greater volumes that would be really interesting?

I can try to answer that. That's a very good question. So what we do see, and that was kind of the point I was trying to make is that greater customer experience is good business for our customers. it drives upgrades to the most advanced network technologies that we offer. And when we upgrade and when we put out new technology, and Fredrik will talk more about the technology leadership aspect of it, we see opportunities to improve pricing in the market.

And that's why -- what you need to focus on here, and that's what Niklas said is actually the ability to introduce new products that allow you to solve the problems and then price at a different level. So we do that continuously in the business. And that's why you see us even if in a very high inflation environment, we've been able to offset that to a very high degree.

Thanks, Erik. Thanks, Laurie. Thanks, Niklas, Börje and Eric. We have now 15 minutes break. So I will recommend you to be back here 11:15 New York time. So for you online as well. So it's 11:15 New York Time, we will start the second block with Frederic, Per and Carl. [Break]

Great. Thank you all. Thank you for coming to the second session. We're going to have now Fredrik Jejdling, heading up networks. It's going to start with the strategy update on networks, then we're going to have Per Narvinger talking about cloud software and service, and we're going to end the session with Carl Mellander, CFO and coming back to a Q&A session, a little bit longer this time than the previous one. I'll give the floor to Fredrik.

Thank you, Peter, and welcome back, everybody, for the call to break, and welcome back all of you online as well on the virtual game. So let me start by saying over the past 5 years, we've been delivering towards the strategy presented here exactly more or less 5 years back, not far away from exactly this point. It was at this building 2017, 5 years back. We embarked on our strategy towards building market share and they're building profitability by increasing our market share. Now today, I will talk more about bringing forward the success, how we build on that success, and we can extend our leadership in an evolving market. We have to understand that certain parameters extraordinarily that are impacting the way we can do our business in a good way going forward as well, being architecture question in geopolitics, it'd be supply chain, all of these questions, all these environmental factors we need to relate to, to be able to continue winning also in the future. So this is what this session is about. So this is the agenda, I will talk a little bit about our ambition here and coming back then to the market share ambition. Our strategy, and again, we bring in some additional components understanding that took us here may not take us to the place we need to be, let's say, 5 years out in time. And then we get back into the money part and the value creation of what we see we can do going forward in terms of generating continued good EBIT profit with improved capital efficiency over time in networks. So if we start, there, I'm just going to recap. This will only be a minute or so then we look ahead. But if we go back 5 years, what we actually said. And I would say most of these parameters we have overachieved on based upon our own assessment of the market share capabilities and the profitability achievements. Now it's also come with a higher level of R&D investments. So we started back in 2017 looking at the strategy, investing for in technology and cost leadership. Cost leadership for our customers, the best production cost, utilizing our best technology for offering that and providing that, but those investments are also gross margin conducive for ourselves. So that's allowed us to grow the gross margin of the company. We wanted to take that profit improvement and selectively increase market share. and then work with a customer to secure their 5G leadership in their respective markets. Long story short, we managed to get our market share up from 33% up to 39% over the 5 years. And we more than doubled our profitability from SEK 15 billion to SEK 38 billion. And looking ahead, fundamentals of this strategy will remain. Quickly looking at the market. One sort of cool fact is actually that in the fastest-growing generation of [indiscernible] mobility generations, Ericsson carries 50% of the world traffic and 5G outside of China. If that's because customer sees us as providing the best TCO or the best cost per gigabyte and if that's the definition of the technology leadership, which in essence only is when the customer choose us, then I believe we've done something good in the market. And by all sort of external benchmark, we are also performance leader. But as I said before, those kind of -- that approach is great, but it's only a starting point when we look ahead. There are other value levers, other climbing S curves that we need to invest in or work with in order to increase the value of networks going forward, again, take into consideration the external factors that are impacting us in the market today. So we have at the bottom left-hand side here, where we talk about investing in technology leadership for the benefit of our customers, providing a better cost picture, gross margin conducive investment for us, that will continue. If we're not ahead of the curve in technology, our customers will not pick us. It's as simple and as difficult as that. But we need to do that in an increased inflation situation with increased cost in the system with the supply chain disturbances, et cetera, we need to secure that, again, increased speed, productivity, utilize our resources in R&D, our supply chain in a better way or the improved way. But never compromise our lead into 6G, which obviously is the next generation of mobility, where we look at networks being more built to be more resilience, critical infrastructure, open sustainable and intelligent. So it's not enough to be in the bottom left-hand corner. We also need to secure focus on productivity and continued investment in leading in the future. So if we add those levers to the 3 value steps, we think in a stable market, we have the opportunity with the deals we have been taking as well as the continued investment in technology leadership, we think we can continue growing our market share by, let's say, 1 point per annum from 39% today that we spoke about before. Forecasts show a flat global RAN market, and we don't really know exactly how that's going to pan out. We take the [indiscernible] and numbers for that. But we see this discussed before, the near-term growth in the Indian markets, some emerging markets, a little bit more normalizing levels in the North American market. If market comes higher than that, we have enough investments to be able to capitalize and take that market share should it come and be added on top of the growth that we see going forward in the market with a flat growth. But long-term upsides also in fixed wireless access, mission-critical connectivity. Point is we are dimensioning our R&D and our systems to manage a 0% flat market with increasing market share, but with the opportunity also to pursue any potential upside opportunity on top of that. So in the next section, I will discuss then the strategic priorities for how we're going to get into that -- to capture that market share and also later on than the related financials. So our strategy then and again, bringing with us what was good over the past 5 years and making some additional adjustments to secure competitors out in time here. The first one might sound a little bit obvious, honestly, that you make your customers successful. But it's a fundamental part to really understand that because in the early phases of a new technology launch a new generation, what happens then is that customers typically build to spectrum requirements, and there's a requirement for government sports to build a certain volume. Beyond that, if we want to get beyond 20% up to 100% mid-band coverage, we need to secure that we fundamentally understand what the customers want out of networks. And there are 3 things that we believe is important here. Number one is that we continue investing for strong cost leadership. So the cost per gigabit per second need to be the lowest if you invested there to networks. That doesn't mean that our equipment is not advanced. It takes very advanced equipment to actually deliver that. The second point we want to do is to secure sustainability leadership for a couple of reasons. Number one is the energy prices, the energy consumption needs to reduce on the base of that but also the longer-term perspective of the net zero requirements across our customers. Second priority is to continue investing in technology leadership for 2 reasons: number one, secure that 1% market growth that we think we can achieve but also securing that we can do it in a more gross margin -- gross income accretive way. So that the growth that comes in, in terms of the customer growth up to 39% to 43%, 44% that we can do it with improved profitability over time. The third part then is fundamentally lend to deal with the current challenges across cost, inflation, supply chain challenges we need to secure that we can maximize the productivity throughout the whole production chain from development to supply manufacturing and out to the site, through digitalization through different means of developing cloud-native development methodology, et cetera. So that's the summary of the 3 strategic priorities. And we believe it's important to strengthen and continue delivering healthy gross profits from EBIT profits from networks with improved capital deployed. So if you then look at making our customers successful, and as I said, there are 3 steps to that. Number one is really customers who choose us to tackle the data growth. And you see on the left-hand side here, I think sometimes the word says more than -- or picture says more than 1,000 words. And if you look at the left-hand side, that's typically what a site can unfortunately looks like after 4 generations of build-out. It looks pretty messy, doesn't it. With our latest technology, we can actually facilitate the Factor X capacity per site growth and reduce at the same time, the total power consumption or energy consumption size and weight, obviously, by over 30%. And we do this better than any competitors. The way we design and architect our products, the way we build our own chipsets allows us to do this at a smaller footprint, smaller size than our competitors can do. And that's again where we ended up leading the 5G rate compared to our competitors. So I decided actually to -- and this is a small, you probably even have noticed it up on stage. But if you look up on the right-hand side there on the graph, you see a little radio hidden behind the antenna dome that is our latest Massive MIMO radio. And it looks like this. We are all radio freaks here and Ericsson we love this kind of gear. But this one, actually, if you compare 5 years back, this is about 20% of the weight. It is twice the output power, half the power consumption and carries about 3x more bandwidth. This is what technology does in development. And when you go home and fly home today, when you put your carry on like up on the sort of shelf up there, that's as much as this one weighs, so you see that this is the kind of thing technology can do, and it weighs as much. as a carry-on bag or a laptop today. So remember that once you remember, discussed Ericsson's technology advantage. So something to refer to. All right. So the next step is, as I said, is looking at net zero, and all companies have a net zero target at this time. We also have one to 2040. We wanted to make it a bit more tangible and divide it into milestone and near-term achievements that are measurable. So we said that by 2025, we need to make the installed grid for a customer comparing 2020 to 2025, reduced site power consumption by 40%. That's a massive step towards 2040, total to net zero. In the supply chain, we also need to make sure that we reduce our supply chain emissions by up to 36% by 2025 so that makes me accountable for that. That's only a couple of years 2.5 to 3 years out in time, and it makes me accountable that a tangible target that's now framed in our software and hardware road maps. Lastly, as I said, we need to make sure that we can take the network that the customers have installed here, make sure they can extend that network into revenue-generating use cases in the most cost-efficient way. We picked up 3 cases here. The first one is fixed wireless access. This represents about another 3%, 3.5% on top of existing revenue in-house mobile broadband. There's an incremental revenue on top of an existing investment that is possible for the -- for our customers to turn on. Second one would be critical broadband the mission-critical networks. And that is about another 1% to 2%. And an example, in the U.S. would be first step, for example, that AT&T build. Lastly, this is important. We have, on the right-hand side, you can see our latest indoor Enterprise Solutions. It's a small little dot. It's -- see if I got a lot smaller than that Wi-Fi antenna up there, by the way, and it's actually powered and fueled by cloud and applications. So you can be run on any type of service. You don't need a dedicated hardware in the enterprise. We believe it's the most cost-efficient way of building enterprise 5G coverage or network connectivity. So that's something that we then sell to our enterprise channels. We then look at investing in technology performance and cost leadership that is obviously underpinning in that growth in market share per year. And here, we got, let's say, 3 avenues that we're focusing on. We already talked about the left-hand side here that we've taken up Factor X in capacity, 30% energy and weight down 50%. We're not stopping with that. Our customers want more, and we need to meet our customers' expectations and requirements. So what we see within the next 3 years, we think we can continue not tenfold in the capacity. We are still within the same technology, but double within 5. We can reduce energy by 40% more, and we can reduce weight with an equivalent point is we need to continue staying ahead of the innovation curve. Otherwise, we will not be relevant for our customers. Again, this is how we can continue to capture market share. We also work on the very long term. We look at 2027 and beyond. And then we're talking about completely different concepts around intent-based AI-driven networks, self-healing networks and actually boundless network pooled-cells mean actually that capacity travels around in cities where people actually needs it. We'll have to come back to that later on. But that's our research what future networks have. Underpinning everything that we do in terms of technology and what we can do for our customers is actually our investment done in Ericsson Silicon. And if anything, this is our secret sauce. This is the software we put on top of this, allows us to do the things we do with size, weight, power efficiency. This is a U.S.-led investment. We base our investments here, we draw our capabilities, largely from Austin in Texas, which is a big pool of these type of silicon capabilities. We set up a center around 2 to 3 years back in Austin, to be able to get the capability within our own company. And we're actually moving further and further down in the value chain to secure that capability, increase our resilience. We don't think it's so smart to outsource our competitive edge. So if you look at the latest chipset we do, they look about like this. They got about 13 billion transistors on it. And we are securing a road maps that we always have the latest access to 7-, 5- and 3-nanometer into our road map. Again, to be ahead of the curve and innovations. Now comes another topic here, our customers. We discussed significant -- several times the architecture and evolution into openness. And what is it and what is Ericsson's position around that? Well, let's start where we are today. And our current integrated architecture based on 3GPP standards delivers the best end-to-end performance and its efficiency and cost in the industry. There's no doubt about that. In addition, compared to newer technologies coming in, alternative technologies, it actually covers everything back from 2G, 3G, 4G and up to 5G across common software and hardware. This will continue to be the dominant choice for CSPs into 5G and beyond here. As demonstrated in India, where we closed out together with some competitors, the Indian market on 5G with integrated solutions. Having said that, we look ahead and we actually see that there is a revolution going on also the way we build networks, and that is the Cloud. It actually allows us to build networks in a completely different way, and it can allow us to scale networks into enterprise applications where our big macro network having been cost-efficient before. So we're going to be serious about building 5G indoor replacing WiFi and 5G over time. We need to build these type of solutions. It also allows us to drive and develop software in a completely different way, in a faster way, more effective way, utilizing Cloud-native development technologies. And thirdly, a bit to the points made by Rory before, it allows us to expose functionalities in the Cloud to enterprises. They are typically all around the Cloud and those could be the network functionalities that we build APIs on top for example. So this is a fundamental development for us. It's -- disaggregation between hardware and software, allowing us to put this piece of software on any type of hardware in any type of Cloud. Now if you look ahead a little bit and think what -- will this is going to end up? And as a matter of fact, we see in the future that both these architecture will coexist. And this is important. The customer has a choice in the future. And we will invest for technology leadership in this type -- in both these tracks. We intend to compete with the best product, the best hardware and software, and they will be based over time on open high-performance interfaces, including the lower layer split. And again, we are actively like Erik was talking about, we're actively defining how those interfaces will look like, whether it's in O-RAN alliance or in 3GPP. Our ambition is to provide the best solution in any disaggregated environment with the best hardware and software, utilizing end-to-end -- building end-to-end system performers utilizing automation, AI software extensions and continuous development and support, utilizing the [ SMO ] architecture on top. So we prepare for the networks to go into an open standard, and we intend to compete and win in that environment as well. If we then take the last part here, and that is our productivity and capital efficiency. If you look at R&D, we focus on a 10% year-on-year output over cost efficiency gain or productivity gain. And we can do that because we start working much more with Cloud-native development methodologies that allows us to utilize a different system, different development platform, different testing platforms. And -- but on the basis of it, it allows also ourselves to build a much better developer experience for the actual user and that's probably the most important part here. 10% year-over-year. And to Börje's point before, if there is a market demand, we will build better, newer products, hardware software to drive the market and the net sales. If there's no market demand, we'll take that saving and that productivity gain to the bottom line. Supply, we looked at Niklas example before on the Texas factory. We are digitizing and industrializing our supply flows end-to-end. We are also coming from a period of a higher level of inventory resilience because we wanted to deliver to our customers. Now we need to build a smart resilience on the back of an [ easing ] supply situation -- supply chain situation across the world. So we build what we call smart resilience, still being able to deliver our customers as priority #1, but do it with lesser inventory over time. And we do that with demand shaping and sensing with our customers. Network development, i.e., from the time it goes to the factory until it hangs up on the sites, that lead time we want to do is by 50% in the industry. There is some archaic processes here that we still work with end-to-end and we are digitalizing automating those processes and the early pilots we do show a very promising result in reducing customer lead time. So this is then a heightened focus on productivity and capital efficiency. If we then tie it all up here to -- in the end here, what that means from a value creation perspective. And hopefully, you step out of this meeting that network is going to continue building or delivering good EBIT profit and with an improved capital efficiency over time. We see here that we have the EBITA margin bridge that [indiscernible] and Carl will discuss later, very short and of course, network site is contribution up to the 15% to 18% range. And as we indicated and guided for in Q3 here, we have a range somewhat in the range of 16% to 18% for the full year, that's old news. That's what we talked about a couple of months back. We see the cost inflation, business mix headwinds that we talked about before as well as here. And we are proactive in dealing with it in the categories of commercial mitigation. We secure that when we get a new product into the market that we price that at a higher pricing point where early might have intended. We secured that price erosion is limited in the contracts. And we also take deals like new deals in new markets that are conducive and profitable adds actually to our EBITA margin bridge. So that's category #1 of the [ A, B ] there. And category C is Rory was talking about the SEK 9 billion here before, where, of course, networks carry substantial for 2/3 of it being in cost of goods sold, delivery, supply resource, et cetera, where we see opportunities, as discussed before, to improve. So that together with operational leverage, including IPR, takes us back into flattish EBITA margin delivery with an improved capital employed over time. So key takeaways. Three simple key takeaways: make our customers successful, building the most cost-efficient networks for the customers, allowing them to get to the sustainability, track net zero as fast as possible, faster than when -- anyone of our competitors and thirdly, build and extend use cases and deliver use cases, fixed wireless access, et cetera, in the most cost-efficient way. We continue investing in technology leadership through our silicon investment, we drive the open architectures. And finally, we work with improving productivity and capital efficiency. And all these 3 levers will again allow us to deliver solid EV profit with improved capital employed. So a big thank you, guys. And there with that, I'll ask Per Narvinger to come up.

Thank you. Okay. So my name is Per Narvinger. So I'm heading up the segment Cloud Software and Services. So you heard from Fredrik on Segment Networks. This segment actually has a lot of similarities. So we also, in cloud software services, we build on technology leadership and of course, an end-to-end understanding of advanced mobile networks, but there are also important differences. And first of all, this is a pure software and services business. There is not any hardware substantial in the mix of the business any longer. Another very important difference, of course, is this business is unprofitable. So today, I will explain why and what we are doing about it. It is a multidimensional challenge. So I will walk you through it step by step. But I want to leave you with a clear picture of the actions that we are now taking to return to profitability for this unit. But I also want to start by, of course, outlining the market that we are facing and of course, how we have now decided to engage with the market in this new structure. So -- in our market, the market is really for Cloud Software and Services. It's driven by 2 technology shifts. It's the shift to 5G, but also the shift to Cloud native technologies. And we actually are then engaging with our customers in 3 different domains. You see them here in the middle of the chart. And if we look at the total of the segment, we have an addressable market that we have forecasted to show a low single-digit CAGR over the period '22 to '26. There are pockets of double-digit growth, and that is, of course, then driven by the 5G technology shift and in particular, then in 5G packet core. So we provide Network Managed Services for a customer. We are a leader in that domain. We have business and operations support systems where we have leading solutions and we are the leader in providing core networks to our customers. And you see overall, a flattish or single-digit CAGR in these different domains. But I want to stress then that we will not be solving our challenges by growth. We are then taking actions that are in our hands. So the first very basic action we have taken is that we are embracing the market. We are now making sure that we are organized so we can meet the market with solutions. You could say that in the past, we were organized by commodity. So now instead, we make sure then that we meet our customers with solutions in the new setup. So by creating this segment, Cloud Software and Services from combining the 2 former segments, Digital Services and Managed Services, we are now in a -- we are -- it's possible for us to capture synergies and create a simplified accountability structure that helps us both in SG&A and on R&D side. At the same time, it will actually increase customer value. We will get a stronger go-to-market and a more holistic portfolio management structure. But then even if this segment now contains what our customer needs, I also want to be clear that these 3 different domains we have, they are very different in characteristics. So they come with different challenges. So that's why I'm saying it's a multidimensional challenge we have in the unit. So starting with Network Managed Services, where we basically operate networks for our customers. Networks are becoming more complex. We need to do even more in automation, but this is a 100% services business. Of course, we rely on automation. We rely on AI software, but when we deliver its a services business. We then have, in the middle here, what we call business and operation support systems, traditionally also referred to as BSS and OSS. Here, we have actually also taken the part where we have managed services for IT and also ADM business. So ADM being when we actually then develop and operate solution for our customers in their customer environments. And when we put that together then with our OSS and our BSS portfolio, we get a very good capability to deliver to our customers. But it is a service dominated business. It's crucial to have software blocks or software products underneath that are cutting edge, but you really need the services to tie it all together. And quite often, you also have third parties in the mix. So that's one type of domain we have. Then moving to the third one, and that is the Core networks. This is very much a software product business. You can't really succeed without having the best software products, and they are need to be cutting edge. Of course, there are product customizations on top. There are also, of course, services when we roll out and there are more advanced services that you can sell later on, but it is really a product business. So within this segment, we have then 3 domains with quite different characteristics. I would then maybe summarize it that it's a cutting-edge software and services business, and we are running it then on IT hardware. And that's important to keep in mind then because it's not the straightforward software development, its very advanced software that you run on IT hardware. So then looking at these 3 domains, we can see then that we have now technology leadership. We have the right go-to-market. We actually have a strong market position, but our financial performance is not reflective of that market position. So we have made good progress in 2 of the domains, Network Managed Services and BSS and OSS, but they are now offset by a negative development in the area of Core networks, which is, of course, is not satisfactory, and we are taking actions. So we are taking actions in all 3 domains, and I will walk you through the 3 domains. But I'll then start with Core networks, which is actually the more complex one and the more challenged right now. So for Core networks, it's important then again, that there are 2 technology shifts ongoing in parallel. Of course, we have the transition then from 4G to 5G. Of course, the goal being to get the 5G stand-alone but there is the intermediate step with 5G non-standalone. But under that or in parallel with that, we have the clarification of our networks. So also in this business, we come from a native paradigm. We used to provide purpose-built hardware with software integrated. We went to virtualization where you decouple and the hardware and the software and now we move to a service-based architecture, a Cloud-native architecture. And if you have several technology steps or ongoing technology shifts ongoing at the same time, it's very crucial to decide when to go for what solution and how you transition. So with the Ericsson dual-mode core, we have been supporting 4G and 5G for our customers and Ericsson dual-mode core is cloud native. So it's fair to say that we took 2 steps in one. We went directly to cloud native. And that is, of course, -- that was a strong step, but it has also left us with some challenges. So first of all, we then underestimated the effort on going cloud native. So -- that meant we had to invest more R&D to get the solutions to the market. And it also meant that if you are then having a challenge to deliver on time, sometimes you get compromises on quality and then you need to upgrade more frequently, deliver more updates. And at the same time, you don't have the serviceability there, meaning we have had continued high deployment costs of our 5G core. The 5G market unfolded for the core side in 2021. We had a great offering, a strong offering with our dual-mode core. And we got -- we had the opportunity to grab market share. and we did so successfully. But it also means that if you have underlying challenges for deployment, it doesn't help you if you have sales growth. So we -- it's actually not -- we did not benefit from that market share that we successfully got. We are also a software business. And if you compare to having hardware and software, you typically -- if you have pure software business, you have more flexibility. And if so we have ended up with too many configurations, too many variants in our portfolio. So we have a high degree of subscale software business in our portfolio. You can see that as an untapped potential because if we have sold that as a customizations or high-value services, it would have been fine, but that was not how the market worked out for us. So those are our challenges in this area. So we are now taking actions. We will avoid subscale software in our product development. And we will, of course, now we have a great position on the 5G market. We will now leverage that and accelerate in automation to make sure then that we lower our deployment and maintenance efforts. You can see that our 5G core is like our flagship is paving the way for product Cloudification or going to cloud native in Core networks. But we will now apply those learnings to the rest of the portfolio. And in parts of the portfolio, the technology steps are smaller, so we will have a more incremental implementation of cloud native in the -- for already deployed solutions. And thirdly, we will apply a more stringent profitability discipline, to make sure then that we have different commercial terms when a standard software product offerings or if it's uniquely customized. So that sums up then the Core network area. And as you see, dual-mode core is live. So we are strong in the market. It's up and running. We need to fix the deployment costs. The other 2 domains then, moving on, in business and operations support systems, we have had major improvements in this area. So here, the improvements are about taking them to the next level. And as I said, by combining ADM, managed services, IT, R&D and service delivery in one unit, it gives us an opportunity to streamline the portfolio. And we get a stronger go-to-market with a combined OSS and BSS offering. If you have both software and services in the same unit, it also gives you the opportunity to balance between how much is R&D and how much in services. And then depending on how many customers you have, you can then picked the suitable mix. So with this setup, we will be able to have more reusable software, make sure that the software that we build here can be used for many customers or otherwise do it as services. So this is probably the area that benefits the most from the setup of this new segment. Again, here, we will apply a stringent profitability discipline to make sure then that when we sell high-value services, they are also appreciated by our customers and that we get paid accordingly. For Network Managed Services, the third domain here and the smaller of the 3. Here, we have also had a fantastic journey on improving by having more automation and, of course, moving to fully data-driven operations. We will simply continue on that journey and of course, make sure that we continue to transform our contract base to fully data-driven operations. So these 2 journeys are then quite different from what we have on the Core network side. So let me then try to summarize the actions we are taking in this segment. So we will get cost out by realizing synergies. And we are in the middle of that process. And I'll just give you -- to give you a flavor for the magnitude. So we, of course, have set now the more senior management levels. And we have then -- when we look at positions, we have decreased the number of senior leaders with 30%. So obviously, when you get further down in the job pyramid, you will not see the magnitude or the same magnitude. But it shows if you can remove a management layer and you can get -- you will get a more agile organization, and we will, of course, simplify our operations. We will continue to invest in technology leadership definitely in cloud native AI machine learning and automation. That is also what will help us to profitability. And as I said, we will have then a more stringent profitability discipline to ensure we have a scalable software business. So with that, we will then contribute to Ericsson's overall profitability target for 2024. And then for this segment, we will, of course, continue to take gradual improvement towards long-term sustainable profitability for the segment. So then moving in over to the EBITA bridge here. You can see the contributions from cloud software and services in the overall -- for Ericsson Group. We guided on EBIT level in the Q3 report. So if we then remove the amortization. You can see the first bucket is the significant improvement we get, the second green bar here, what we get from cost efficiencies and synergies. And that is then by having a more mature service delivery and also having segment synergies that generate these improvements. So those are actions that are within our own hands. The second bucket here, stringent profitability discipline is then by avoiding a subscale business and then making sure that we are not having solutions that are not scalable. You also see that we are in the period have a favorable business mix towards '24. And of course, we will also get operational leverage from what is done on group level, not the least in IPR. But in this chart, you see then that the green goes well above the blue, meaning we get the profitability. And that's also why we said that on full year '23, we will reach profitability for this unit. It is in our own hands. And that is then on EBITA level, but actually, there's very little amortization in this business. So it's not very different for EBIT. So trying then to sum up and the key takeaways for this segment. It is a multidimensional challenge. We have now introduced a simplified accountability and organizational structure, and that actually aligns well with how our customers want to buy from us. We have gotten a great position in 5G on the market. And so now we will then leverage that leader position that we have and then accelerating automation to make sure we lower our deployment efforts. And finally then, avoid subscale business, having a more stringent profitability discipline. And by doing so, we will then reach our long-term sustainable profitability for this segment. So we have identified what needs to be done to reach profitability. Execution has started, and we are confident that reaching profitability is in our own hands. So that is the summary of the segment. Thank you very much. So with that, I think I might call, Mellander, our CFO on stage.

Hello, fantastic, really brilliant to be here and see all of you in the room as well as everyone on the webcast, of course. It's fantastic to be able to gather again. Over the next, yes, 20, 30 minutes, I'm particularly keen to give you 3 takeaways. One is that we have built a strong financial foundation over the last couple of years with a strongly improved free cash flow and return on invested capital now up to 30%, 35%. Secondly, that we are going to show you and we have showed you during the day already, the path to our long-term target of 15% to 18% EBITA and how we will enter the lower end of that range already in 2 years in 2024. And the same goes also for the free cash flow target, where we are, as you know, targeting 9% to 12% free cash flow before M&A as a percentage of sales, also by 2024. And the third key takeaway that I want to leave you with is that we are clarifying now the capital allocation priorities in our group which we hope will be helpful and clarify how we think around those things with investment, of course, in the business, but also emphasizing shareholder distributions and bolt-on M&A or for, of course, maximize value creation in our business. So if, David, you help me with the slides here, these are the 3 key takeaways, and I will go through it in more or less in this order. So first of all, quick recap on what we have been up to since the last CMD in 2020, how we have executed on strategy and how that's visible in the financial results. Then we look again at the financial -- or the long-term targets for the group and how we intend to reach them. And then finally, I'll talk about capital allocation. So if we take the next one, this is then the house -- value creation house that we discussed in the last CMD back in 2020, where you see the foundation, of course, is the business performance as such and growing the free cash flow, which will enable value-creating investments in R&D, in market expansion but also in M&A. And I think it's fair to say that we have executed according to this model since then in R&D, and we'll get back to that, but to mention some examples what we have done in -- on the Ericsson Silicon side, Fredrik talked about that. Cloud RAN as well, 5G Core, Per talked about this that has enabled us to grow the market share to 39%, excluding China in the RAN market now. And of course, on the M&A side, the recent major acquisition of Vonage, major transformational step for us and entering into the enterprise space. And on the way to building Ericsson as a platform company, we have talked about -- you heard from both Börje and Erik and Rory on how that is going to be value creating for us. So -- if we look at the numbers then, and I think the strategy execution has really been visible in the financials. I picked a few slides here to illustrate that. First of all, if you look at the green line here, this is return on invested capital. We can see how that has developed since 2017, and we are now up to levels around 30%, 35% return on invested capital. It means we have structurally improved our capital returns. And this on an EBIT level of around 12%, which sets quite a lot around the capital efficiency of our company now. That stronger capital efficiency, of course, has also generated a stronger cash flow. And you see this is the purple line here, also developing nicely. And you know we are down a bit on free cash flow the last couple of quarters. And I think the reasons are well known to you, to most of you, it's, of course, the lower IPR revenues. And it's the fact that we have invested in our working capital and inventory specifically to meet customer delivery deadlines. Going forward, though, IPR is back on track, I would say, with the recently announced deal and more to come. We'll get into that in a minute as well. And when it comes to working capital, of course, that's really front and center for us in Ericsson. We'll talk about that as well. And at the same time, we've managed to through -- the cash generation, we have managed to improve or increase the dividend consistently since 2017 than for a better shareholder distribution. And at the same time, we have built resilience in our company. And you can see that one example of one proof point of that is the rating development, where we are now investment-grade rated by 2 out of 3 agencies. We think this is important, and we intend to maintain that status. I often get a question actually in meeting some of you and other people. What was the secret sauce? What was the one most important ingredient in the turnaround of Ericsson? And I always reply, I fundamentally believe that it's the R&D investment. It's quest to technology leadership globally, that is really what made the turnaround possible for Ericsson. And you can see here on the left graph how R&D investments have developed over time. And -- but the big point here is really the right-hand side of the graph where you can see how market share has developed and how gross margins have developed as well in our company, and we see a very strong correlation between the two. So with that view in the rear mirror, what lies ahead now? Then you heard Börje talk about our business strategy. It's really, of course, leadership in mobile networks, that's quite clear, expanding to the enterprise space and create, as Erik was mentioning, the virtuous circle between the 2, but also being first in critical innovations and being able to capture opportunities. So that's in essence, a business strategy. Then, of course, I'd like here to combine that with 3 items which have to do with the value creation that comes out of the business strategy. And of course, one it's around performing in the business again and delivering an ever-growing free cash flow. Very tough cost and capital efficiency. And also thirdly then capital allocation, closely linked to our strategic thinking as well. So from that, if we then look at the long-term targets that we have talked about, and we can jump into the next one here. So I think many of you recognize this slide. It's around our long-term targets on sales to outgrow the market. The EBITA 15% to 18%, it's very familiar by now to you. The free cash flow, 9% to 12% of sales and also the sustainability target, which is very close to our heart as well, of course, with net zero in our own operations by 2030 and across the value chain by 2040. And so as you are so well aware now, we have chosen EBITA as the key P&L metric because we think it's the most relevant metric in the P&L to judge our performance in the business given some of the recent acquisitions. And I'm going to step out maybe a little bit now on the key presentation here to take -- bring up a more practical thing, and that is about amortizations, i.e., the delta between EBIT and EBITA amortizations, and I want to mention this here when I have the opportunity because I think it's very important, and I hope that you all will model this correctly going forward. So the amortizations, we are looking at now and expecting are about SEK 3 billion per year going forward or SEK 750 million per quarter. However, now in the fourth quarter, we expect a bit elevated level because we have concluded the PPA, the purchase price allocation for the Vonage transaction. So it's going to be almost SEK 1 billion of amortizations in the fourth quarter. So I would be very happy if everyone here takes note of that, and we get that right in the modeling. Okay. Now I step back into the presentation here. And -- so now if we look at 2024 then and how are we going to reach where we want to be, we can start with top line. Look at the growth on the next slide here. So starting on the enterprise side, and we've heard a lot about enterprise today already. But basically, it's to accelerate growth, of course, in what George talked about, that's the Enterprise Wireless Solutions and then execute on the business plan with Vonage, including the buildup of the Global Network Platform. This is what Rory addressed earlier also. When it comes to Cloud and Software -- Cloud Software and Services. Per discussed this, this is about profitability, not so much about top line at this stage. It's more stable, as you can see, stable top line development in that segment. And then thirdly, Networks, Fredrik made the case very well here around going for profitable growth and market share gain driven by 5G investments globally, of course, and based on the technology leadership, we expect the market to be rather flat. We have said that today and Börje repeated that. But our ambition is then to grow 1 percentage point over the market per year. So that is top line. Now we move into the profit bridge. And we start here with the baseline. It's around 13% EBITA. This is the rolling 4-quarter number adjusted for some -- some one-offs. And from this level, we do see now a credible path to entering into the range 15% to 18% by 2024, already. And how do we reach this target there? We can look at and break down these various components. The first one is red, as you see, it's inflation. Obviously, we are estimating inflation to be there to remain there during '23 and '24. And that will impact, of course, our business. But to offset this, we are attacking cost in a hard way. Börje mentioned the SEK 9 billion in gross cost reduction. I'll drill a bit more into it, and there were some questions here before, so we can look at that more in detail. Then the higher IPR revenues, we have signed now with one of the large players, as you saw, Apple last week, and that will put us in a good position to continue on that path. Finally, in this other bucket, we have combined a number of factors. We have, of course, a changing market or business mix. We have the large 5G rollouts that we have talked about also in earnings reports, some of which negatively and temporarily might impact the gross margin. On the other hand, of course, we have a lot of other profit improvement that we spent quite some time talking about here today, which will counter this, and we have improved profitability in all the segments. We have operational leverage from growth and so on. So in total, we expect these major factors to bring us up to the 15% to 18% EBITA target by '24. And obviously, beyond that, within that range after 2024 for the more long term. So I'll drill down now into a couple of these building blocks, starting with cost. So here, again, you see the SEK 9 billion, it's split between SG&A and COGS and about 30% is selling, general and admin and 70% is in the cost of goods sold. There was a question on timing here. I think Börje answered it very well. I mean we -- what we are saying here is that by the end of 2023, we will have a full run rate effect of this cost saving. And of course, it will be happening throughout the year. And we are saying that we estimate the restructuring costs associated with this cost-out effort now to be around 1% of net sales in 2023 as well. So what is it actually we will do? And you see some of the bullets here. We will accelerate efficiency gains, [ not least ] in service delivery, which is a big machinery in Ericsson, of course. We're working on automating, we're working on digitalizing workflows, et cetera to take out cost from service delivery, but it's equally true for supply chain. I think Fredrik mentioned that as well. Then we are streamlining operations through our company, through what we call business areas, market areas, group functions. And that has a lot to do with the simplification also to take out -- improve our processes, improve ways of working, take out any waste of that, but also things like reducing the global real estate footprint, decrease some of the IT spend and so on -- and overhead costs. But finally, I also wanted to make another point here, which is that we model, of course, for continued inflation. We model for higher costs and so on. But it's also true now, and this is a positive that the supply chain situation is easing. We see that on the component side. We see positive signs of freight costs, et cetera, logistics costs actually coming down. So that's a positive also. Next up, IPR. And I would say, I mean, IPR revenues are really a testament to the great innovations that the Ericsson teams create. And now we have more than 60,000 granted patents in our company. And we have been on the journey of licensing out our technology now for more than 20 years. So with the portfolio of patents we have now in 5G and the multiyear contracts that we have signed now, both Samsung and Apple for 5G technologies. We are -- well, that gives us confidence actually to continue this transition into 5G licensing. In the top graph here, you can see some of the important contracts that we have signed over time. And you can also see where we are hinting we will end up in terms of revenue. And an interesting fact, actually, we have licensed a little bit more than half of the 5G smartphone market so far, which indicates potential going forward. So a bit more than half if you calculate units shipped. And in the bottom graph here, this also gives us confidence. And you can see how this market is expected to develop with the 5G handsets being a big driver for growth in the licensing piece here. But we also see an increasing number of cellular devices in areas like consumer electronics, IoT, automotive, et cetera. So this gives us confident about the IPR portfolio and revenue going forward. As you could see or deduce from the Apple press release, we estimate that the revenues from IPR in our company for the full year 2022 will be between SEK 9.9 million and SEK 10.4 billion in 2022. And of course, we believe we are in a good position now to grow that amount going forward substantially. So these are some of the activities that we undertake in order to move ourselves up the profitability curve. And to summarize this part, we can look at the segments bridge here, how does this come out in the segments, if you look at the totality of the company. And starting with Networks here, we talk about changing business mix on the one hand, but that's compensated by market share gains and commercial activities, as we heard. And then we have, of course, the inflation to handle. We talked about that already, how we counter that with cost efficiency in supply and service delivery on the Network side. And of course, IPR helps as well, the segment here. On Cloud Software and Services. Yes, it's all about, of course, improving profitability. I think Per was very transparent in what we do and where we are at the moment on this. But it's about avoiding subscale software, for example, it's about automation, it's about taking cost out. And then finally, on Enterprise, of course, here we will continue to invest for the long-term growth, and that's quite clear. And we're going, of course, for the higher value offerings, the high-margin parts of offerings here. And we will also continue with portfolio optimization. I just wanted to make a reference to the IoT divestment that we also announced a week or so ago, I think, which is an example of that type of activity as well. Okay. So that concludes the EBITDA part. And now I wanted to drill a bit more into working capital and free cash flow. Of course, my very good friends in Ericsson and my personal favorites. And I think working capital to start there, of course, it's really high priority, a top priority for us in Ericsson because it's, of course, a way to secure consistent free cash flow in the business. And if you look at this graph, we come from, back in '17, '18 around, yes, 15%, 16% working capital of net sales. And then we have moved that down structurally to around 10%, as you see, fairly stable over the last couple of years. And then again, just to reiterate, the uptick that you see towards the end, of course, it's really mainly attributed to the inventory buffering that we have done. And remember, this was a tactical decision to make sure that we can meet customer demands and actually deliver in a challenging component situation. But of course, now that the supply chain starts to ease up, this will reverse back again, of course, and help cash flow generation going forward. We said also in the third quarter report that given some of these large rollout contracts that we have won and which are starting now, we will see an elevated working capital level going forward in the near term or midterm. But those are, of course, also very positive for our company in terms of scaled wins. So what is it we do around working capital? I mean this is not a short-term campaign. This is a way of working and living in our company and some of the things we do to improve this further. Of course, we work a lot on inventory reduction -- lead time reductions and so on. And coming out of the situation now will certainly help our free cash flow generation. We also work on accounts payable, of course. This is around [ PCC ] with suppliers, for example. Further enhancement of our credit risk management is important also and good, efficient ways of working in cash collection. So I mean, the ambition here is to continue to structurally reduce the working capital. And then, of course, as you know, individual quarters can vary depending on business mix, et cetera. But for us, it's about structurally improving our efficiency also when it comes to capital. Then I want to make 1 more point on this one. And it's that now that the Enterprise side becomes a larger and larger part of Ericsson as a whole, the positive cash flow profile of that business will help the group as well to improve here. So welcome, Rory, and welcome, George. You're actually going to contribute quite well. That's great. So moving from working capital then to free cash flow. And again, I believe we have actually fundamentally changed the margin profile in our company, but also the capital efficiency. And we've seen the result of that. Underlying cash flow performance has been strong since 2020. On this slide, we separated out changes in net operating assets or call it, working capital from the free cash flow, just to see how that plays out. And what it shows is really that the underlying cash generation capability of our company is strong. And then sometimes, we have a need to invest in working capital. This year has been one of those times. And we talked about it before, but -- and you see it in the blue bar, the minus [ SEK 10.1 billion ] here is really mainly related to that inventory buffering that I was talking about. But that, as mentioned, will, of course, reverse. Okay. So that was the section around the long-term targets and how we intend to reach those. So now the final section for me is then around capital allocation and capital structure. And we can start a bit with capital structure. This remains rather the same. It's about balance sheet resilience. And the idea with our capital structure is really to provide, of course, support for our strategy execution, but also flexibility to act on opportunities with discipline and thirdly, to ensure that we also minimize risk for financial pressure or downturn. And the foundation, of course, is high generation of free cash flow and good return on invested capital. You can see here to the right hand that we are in line with the capital objectives that we have on free cash flow, net cash and the credit rating as described before. So capital allocation then, and Borje already showed this one. But I would say, of course, the capital allocation strategy is very tightly linked to our whole strategy and to how we think around value creation as well. And we focus really on 3 things. It's to improve free cash flow, and target is 9% to 12% range that we talked about. And we intend to do that and get back there by 2024. It's also to deploy capital wisely for maximum value creation while at the same time, safeguarding the balance sheet strength in our company. So -- and what do we mean with that? We mean that we will, of course, continue to invest in our business, and we have seen very strong link, as I showed you before also, between investments in the company, in the R&D, technology leadership and the returns that we get out of that. But we also feel that shareholder distribution is key to us. It's very important. And we have now built up a strong financial position. We will continue to do so. And we think that puts us in a position to offer stable to progressive dividend over time. As everyone knows, this is, of course, an AGM decision at the end of the day, but this is how we, in company management, think about this. So final comment here on this, and I want to repeat, when it comes to M&A, we have incredible focus on making the Vonage acquisition successful, of course, Cradlepoint as well. But Vonage is the latest one and the larger one. So we intend to be cautious on M&A, do the right thing, of course, but we're probably looking more at smaller bolt-on acquisitions and not any large, new acquisitions for now. Okay. I will round off with the same 3 key takeaways. I hope you heard them as we went along here in the presentation. It's really, one, we have built a strong financial foundation, return on invested capital 30%-35%, strong free cash flow generation. Second, we have a path to reaching our EBITDA margin target and the free cash flow margin target as well by 2024. And third, we have clarified the capital allocation priorities now with organic investments in our business with focus also on shareholder distribution as well as bolt-on M&A, all for maximum value creation for the company and for our stakeholders. And this completes the picture here when it comes to financial strategy. Before handing back to Peter, I just wanted to say now that it's actually -- the holiday season is around the corner, and I just wanted to take the opportunity to thank everyone here for all the engagement and interactions during the year, and I hope you get a good holiday season with family and friends, et cetera. With that, I hand back to Peter. Thank you.

Thank you, Carl. You need to stay on stage, Carl. And I would like to invite also Per and Fredrik and Borje, please as well back on stage for the Q&A session here. And we have around 500 people online as well, so I will try to alternate between the venue here in New York as well as the questions online. But I'll start here in New York, and Simon was first out here. So you will be first of the question.

Simon Leopold with Raymond James. I want to get some clarification on the IPR outlook. So given where you stand today, so not assuming new deals, can we assume that the 2023 IPR contribution is sort of back to normal in that SEK 10 billion plus? I want to understand what you're baking in and whether there was some fixed payment in 2022 to account for anything like that.

No, I think you can assume that. So now in 2022, we'll be around SEK 10 billion, so SEK 9.9 billion to SEK 10.4 billion. That's really the guidance. And now, of course, as we have the Apple deal done, it's really pegging us up for additional licensing agreements with other unlicensed parties. So this is what we will work on, of course, during next year. And the idea here is to increase the revenue beyond that level.

Thanks, Simon. I'll actually take a second question here as well in New York. We'll see Frank here. So please, Frank.

So a little bit on India. Both you and your main competitor have talked up the scale of this -- the new contracts being won on the business in India, implications for working capital needs, as you mentioned, Carl. And also previously about the kind of the high-spec level compared to the past that those operators are demanding on 5G, I mean, massive MIMO and other. It's not basic equipment that they are ordering. I would obviously suspect, given their ambitions. And given this, if you compare to kind of the level India has been at with regards to revenues in the rolling 4 quarters leading up to the third quarter, what levels are we looking at for 2023, 2024? Could it be 3, 4x the magnitude of the perhaps a little bit depressed level that we've seen in terms of India revenues for you guys up until now?

Well, I can start on the first couple of questions. First of all, India is a fundamental market for us, as Borje was talking about before. It allows us to access, to scale market that we, given that China is sort of not accessible for us anymore. It allows ourselves to build and scale another big market. It's also a market where 5G will be built faster than in many other markets. If you look at the grid in India, basically, all of it [ we've been ] talking about, 20% in the world being built with massive MIMO, in India it's going close to 100% immediately. So you're going to see a very, very dense and effective 5G network that we're going to learn a lot from. On the second or third point, I think, you're spot on exactly this one here, what goes out in hundreds of thousands of volumes in India. So contrary to when I was there, 10 years back or so or 12 years back, I have a history there. We built the latest technologies now goes out in Indian scale before it was the tail end of technology that went out. And as a matter of fact, if we're able, let's say, provider, as a vendor to provide a cost profile that is far better. This is a capacity factor 3, 4, 5 to compare to standard solutions, the Indian buyers, I would say, the Indian customers appreciate that as a matter of fact. So the deals that we take are gross profit accretive to us, of course. Otherwise, we wouldn't take it.

And in terms of the revenue levels in India potentially going forward compared to the past indicatively?

I don't really want to comment on that. Rory I don't know if you have any -- suspect you didn't...

I don't think -- no, I think it's -- we haven't gone out with market shares, et cetera, and build plans. So it depends on our customers. And I think they should communicate their own build plans.

Thanks, Borje. Thanks, Frank.

Plus, it's a very sizable market. I'll put it that way.

I see I have a question here online. And as a reminder, if you have streaming on the webcast, please mute your webcast audio while asking a question, so we can get the quality right here. So I'll move then to online, and that is from Peter Kurt Nielsen at ABG.

Very interesting. I have a question for Per, please related to CSS, please, if I may. Per, I guess, your target for breakeven in '23 by the sound of it, it's mainly sort of cost -- that the portfolio simplification, et cetera. How far will that take you? And what beyond '23? Will we expect -- to start to see 5G Core revenues come in earnings? I guess the cautious outlook for next year CapEx spend will also perhaps slightly delay 5G standalone. So when do you expect to see 5G Core revenues materialize in earnings and to leverage upon that on the digital services margins? And lastly, where should we -- can you give us any indications as to where do you expect sort of long-term margins for the business to be? Will they be in line with this target for Ericsson? Or has that view changed?

Okay. So going back to the bridge I showed, there are a number of buckets where we're making improvements. And as I said, when it comes to 5G Core, the key challenge is not the top line. So the key challenge for us to make sure then that we get a more mature service delivery because that is what helps our profitability. And as I said, we will be contributing for the 2024 targets to the overall Ericsson Group. And of course, after that, this segment will have to continue to improve incrementally. So we are not stopping at '24, there is more is going to happen after '24, but already then by the end of the next year, by end of '23 we reach breakeven and then we will, of course, continue to improve. But you will see the 5G Core revenues come, but the key is we need to get the deployment efforts under control.

Thank you, Peter Kurt. So we move back to New York City again. So I'll take a question here among the audience, Andreas here. So you have a question?

A question on IPR. Definitely not an expert how that works. But can you -- you said that given now you have the Apple agreement, there will be others joining. Can you explain that process and to make us more comfortable that this will happen?

Yes. Yes, I can try. I mean -- you could say every deal that we make proves the strength of our 5G patent portfolio. And I mean, we're happy with the deal that we have now first, of course, with Samsung now also with Apple and it proves the point to all the actors in the whole ecosystem also that Ericsson's portfolio in the 5G era, if you like, is strong. And of course, now we will target other unlicensed parties there who are, of course, in need of securing that they have the right to use the technology for their handset sales or device sales. And we -- it builds confidence when you -- when we nail the big ones, Samsung first and Apple then. Of course, there are smaller players as well that we believe will follow suit.

And actually, we should say we also designed their own purpose, the way to structure the negotiations. So we wanted to take the first -- the big ones first. And then we've been waiting to actually engage with the rest of the market for that simple reason that -- then you establish a price level, right?

Next question here, I can stay in the audience here in New York. Any more questions. Yes, please?

Could you explain a little bit more how you've changed the licensing process, or sorry, the deal signing process in order to avoid the [ fall-ups ] that happened? It seems like there was a huge blind spot in the -- in engaging in the commercial terms that network services endorse. But obviously, it didn't play out as planned.

So first of all, it's a wide portfolio. So we talked about 5G Core. But of course, we have voice solutions. We have mission-critical applications in the portfolio. So it's a wide portfolio. And I think we have changed now. I mean, we do, of course, a proper analysis before we start all development for a particular business. I think we have now strengthened what is the return we should get and how quickly should we get that return. That is how we strengthen what we embark on and what we do not embark on. As I said in the OSS and BSS area, we have flexibility that we have maybe made a bit difficult for us within the company by having it separate into different units, creating a lot of internal conversations if you should be able to decide how much is then services and how much is R&D. And of course, when they bring it into 1 unit, so is it easier to have a more holistic view on both of what you should have in the portfolio and how you should price it when you go to market. So those are things that we are then changing or trying, or we have strengthened internally in the unit.

I'll then move back online to the audience there. Please again mute your webcast when asking questions to keep the quality. I think we have the next question from Aleksander Peterc from Societe Generale. Hello, Aleksander.

Yes. I hope this sound is a bit better now. Can you hear me right?

Good, better.

Excellent. I'd just like to know on the restructuring, the SEK 9 billion of costs that you're taking out, what will be exactly expensed in your P&L? How are you going to phase that? Should we just book all of that in H1 because you need those benefits by the end of the next calendar year? And also, what is the proportion of cash costs within that?

Yes. So the exact timing, we will come back to. Of course, we are pushing ahead now with the cost-out efforts. And for some of those efforts, there is an associated restructuring cost. It could be, of course, when it comes to staff, but also items like real estate, when we exit from lease contracts, for example, where there is sometimes a possibility depending on how it's structured to classify in the restructuring bucket. So we might be looking at something already now in the fourth quarter. But then during the coming quarters, we will increase that over time as we take action and as we communicate the specifics of the cost-out program. I think we have to come back on specifics there.

Thanks, Aleksander. We'll actually stay online. And looking at the schedule, I think I have next question from, I would guess here, Richard Kramer. Hi, Richard.

Can you hear me okay?

Perfect.

Yes. So 2 questions for Borje, really. First, in the S-1 for Vonage, there was forecasts of Vonage, excluding the consumer business growing to a $3.6 billion business in 2026 and -- but with an adjusted EBITDA of less than $300 million. Are you still confident about tripling sales as what's forecast in the S-1? And if so, in this sort of software business, why would the margins stay so low? Wouldn't you expect much more leverage to above Ericsson Group average margins? And then one other one I can't help -- resist. You mentioned diversity in your opening remarks, and we saw presentations really from an all-white Swedish male executive team, excluding the companies you bought. What steps could you say that you're going to take for the next years to increase the diversity of the top management team at Ericsson?

So I'll take the first one...

Yes, sure.

So Rory takes the first one he's not Swedish either but...

No, I'm not Swedish, I'm American. So first, as I mentioned in the prepared remarks, that I think that everyone is being impacted in the tactical timeframe around the reductions, the macro level headwinds. We're still growing and we'll continue to grow in a significant way. It's a bit down from previous years, but we believe that will bounce back over the next 12 -- maybe 9, 12, 15 months. It really is hard to predict exactly when it turns. But it's definitely going to turn. And we're going to continue to use that disruption to invest in our product to try and capture better growth. We're also going to use some of the synergistic opportunities, particularly with the relationships with the carriers with Ericsson to try and improve our profit -- our cost perspective, which will then flow through to profit. We'll also continue to move up stack in terms of differentiated features and functions. And that's an important component to all of the ideas around it. So the market will continue to grow. It had been growing in that 25% to 30% range. It's probably in the high teens, right, over this choppy period. I think it returns into the mid-20s or better within short order, that's depending on how the macro unfolds over the next 2, 3 quarters. And then what we're doing is again leveraging the synergistic relationships that Ericsson has, invest in terms of product differentiation, and we want to continue to grow our highest profit component to drive that feature. So I continue to be optimistic about the future and how we look at it going over time. There's definitely a blip here in terms of the overall market, but I think it returns to a healthier position within a relatively short period of time, maybe 2, 3, 4 quarters. But again, that's -- we'll have to see out of the chop cuffs. Again, I feel better about '24 and '25.

And then on gender diversity, yes you're right or diversity in general. You're right. It's embarrassing, and I think it's not good enough. We need to do a lot better. But what I also want to say, it actually takes some time. So what we are doing is trying to build a much stronger diverse executive base or management layers below, and that will have to come through. And we will start to see that coming through also in the leadership team over time. So I think it's -- this doesn't get sold overnight for us. It's in the business where it just will take some time. Am I happy with that? No, I'm not. I think we need to move faster, and we need to do it better. But let's come back 12, 18 months and then we ask the question again and say, have you made progress or not? And that should be the judge, really.

Yes. One of the things I'll just add on that one is we've been working with [ MajBritt ] in terms of cross-pollination as part of the integration. And it's quite interesting, one of the things that we've been doing, and we're very focused on it in the tech space, and we've seen an increase in our executive ranks and our representation across the portfolio. [ MajBritt's ] view is continue to make sure that every slate has diverse representation to make sure that we are feeding that system, to Borje's point, there's a huge opportunity to feed the system, and you're seeing that momentum. It will translate into senior roles. And I think that you'll see that over the next 12, 18, 24 months. We're very focused on it, too. In the tech space it's a key component. Better diversity, better decisions. It's just the way it works.

But we could -- maybe we should say what we do also. We do a couple of things, right? So we have, I think, a lot of things going. So if you look at the most recent hires of engineers, it's about 1/3 females. That's a fundamental change compared to where this was 5, 7 years ago. That doesn't mean it solves the balance immediately, but it kind of contributes. And if we look at where we recruit, typically, it's less than 20% females in the education space. So we're trying to push that boundaries up. We're going to do better. But I mean, it's -- the ambition is to target gender diversity. If you look at the management team, actually, almost half today lives in the U.S. Yes, we're a Swedish company. But as a matter of fact, George lives in Boise, Idaho. Rory here. I'm in the U.S., Niklas is in the U.S., [ Mortiez ] in the U.S. as well. So when you start to look at this, it's getting a bigger diversity than I think we've ever had in that sense. When we recruit to positions in the company, we require, and Rory referenced this, 1 female, 1 male as a final candidate. So over time, this is going to look very different. But it's a painfully slow process that we're not happy with. But we're focused on it, dedicating to make this look different over time. And we're measuring this internally to make sure it changes. And actually, everyone on the ET has targets related to this as well. It's actually very important topic.

To that point, just to add, the latest recruitments we've done with my leadership team have been 40% female, and we're about 1/3 in the total Networks leadership team.

Thanks, Richard. We will move back here to New York City again, see if we have any more questions in the audience.

I think they're getting hungry, Peter.

I guess we're all getting hungry, but not yet. I'll have one more question here I see online. And I'll see -- or actually 2, but let's move for the first one online, and that is from a Kulbinder Garcha. Kulbinder do you hear me?

Yes. Can you hear me?

Yes. Clear and loud.

Great. And I had a question just with respect to the market outlook. I understand that you guys are saying it's going to be flat in the -- over the next few years. So those comments around inventory levels and those comments around a significant level of uncertainty, I think, is what Borje had said at the beginning of the day. So are you guys embracing for a significant decline next year? I'm just trying to think how could that change this 3-year outlook that you're giving because it just is so uncertain, how do you think about framing where the upside or downside in '23 [ will be? ]

I think what we're trying to say is more that it's uncertainty, which makes it a bit difficult to predict. We know the guidance from some of our customers, right? That's public, it's going down. But we also know we have very high growth in a number of markets where we're gaining footprint, it includes India. So exactly how this is going to pan out, that's what makes it hard to predict. We're very comfortable about the overall volume development, though. So how this will exactly look like? I think we're at an unprecedented time of uncertainty. We recognize that. We think -- I -- when we provide the guidance or an indication where we're going to be, we want to deliver on that. And then -- so to tell you exactly how '23 is going to pan out, I think would not be right. It would not be responsible of me. And that's why I don't want to do that.

Thanks, Borje. Before going back again online, I actually have actually a question from the chat from an Oleg [indiscernible]. The divestment of IoT accelerators. Does that mean that Ericsson will focus on hardware and software products that will leave development of the ecosystem around it to the CSPs?

I would not say that. What we recognize with IoT Accelerator is that, I mean, we've been struggling to make this into a profitable business. And we recognized it needed to be combined to get the scale and to get the right access to the market. And that's why we actually pursue the solution that can give that scale and solve our profitability issue, call it that. As you can see from the numbers, we've been losing to the tunes of SEK 1 billion a year on that one, and we have not been able to turn that around. I think there is a big market still for IoT connectivity and the whole IoT solutions. So that's something that's going to get sold. Many competitors are there. So let's see how that's going to -- I think Aeris will be one -- or partners solving, 1 company solving these problems. So we like to work with those partners to make sure there is an ecosystem around IoT connectivity. But I mean, we have kind of proven we couldn't make it to work ourselves. So we're -- you better take the consequence of that.

Yes. And the other component I hope we got from the global network platform was we're definitely -- we're a software company for sure. But we're going to work on the ecosystem in partnership with the CSPs to create these next-generation use cases that will be the GMP APIs that will augment our cloud-based APIs. We see this as a platform play across Ericsson using 5G as that real fundamental foundation for innovation. So we're definitely going to drive the ecosystem together with them.

Thanks, Rory. As there is no question here in the audience, the last question will then go online, and that's Peter Kurt Nielsen at ABG. So Peter Kurt, you have the last question for the CMD, so please...

Yes, one for Fredrik, please. Fredrik, your ambition of growing your market share by 1 percentage point per year. I guess the footprint gains in India will take care of that in the near term. So that you [indiscernible] the cost globally where you see significant scope for adding to the market and for Ericsson to gain footprint, please?

I don't think I got the full question there, but I try to answer the fragments I understood. And you're right, we try to -- on the basis, both of India and other markets where we've taken market share. We see that combined with a very competitive portfolio that we year-over-year can continue growing 1 percentage point, allowing ourselves to scale R&D in a better way, and quite frankly, learn a lot from the markets that we deploy the technology in. I didn't get the remaining part, but maybe that answered 80%.

And my question was just do you see any new potential emerging markets where Ericsson has access [indiscernible] the footprint gains left?

Any new emerging markets?

Any new emerging markets? Well, our product portfolio is global, our sales is global, so that will include both developed and emerging markets. But it's also true that many of the newer markets are in the phase of rolling out 5G. For example, Malaysia, we spoke about that before. We're in the early rollout phase on India, et cetera. So -- but had the mix between emerging and developed countries, that's hard to predict as such.

Thank you, Peter Kurt. So by that, actually, we are done. And I guess, we've all been waiting for the lunch, which will be served outside here. And you have also the possibility to meet management during that period. So with that, I would like to thank you all, online as well, and all of you traveling here to New York City from Europe and the West Coast as well as from New York City being here. Thank you all for today.

Thank you.

Happy holidays. Thank you.