Ericsson says no hardware is exported to Russia, only software support

By Supantha Mukherjee

STOCKHOLM, September 23 (Reuters)Ericsson ERICb.ST said on Friday it only provides software and technical support to Russian customers and has not sold any telecommunications equipment there to mobile operators since the start of the war in Ukraine, after Swedish media reported that the company had continued its exports.

Shares of the company fell 4% in morning trading.

Ericsson suspended operations in Russia in April and said in August it would leave the country in the coming months. It recorded a charge of 900 million Swedish kronor ($81 million) and laid off 400 employees in the country as it shut down operations.

“As part of the sanctions, we are providing the software and technical support for the products we shipped before the invasion, allowing for opt-out while fulfilling contractual obligations,” a spokesperson said.

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

Rival Nokia NOKIA.HEwhich also announced its intention to leave Russia before the end of the year, said it was carrying out limited maintenance of critical networks to fulfill its contractual and humanitarian obligations.

Sveriges Radio Ekot reported that Ericsson applied for 12 sanctions exemption permits from the Swedish Strategic Products Inspectorate and obtained seven.

Punishments listing by the Swedish authority include software and technology related to telecommunications.

The outlet also said products Ericsson had been given permission to export to Russia could be used for the military.

Ericsson said its products are designed for civilian, non-military use.

The Swedish authority issued a statement indicating that the exemptions were related to civilian use and civilian end users.

Two analysts said the Russia report was not going to look good for Ericsson, which faced a scandal in February over payments to the Islamic State militant group in Iraq, triggering investigations by different US agencies and eroding more than a third of its market value.

“Ericsson hasn’t breached any penalties as it has been granted approval…but that contrasts quite sharply with the statement in its second quarter report where they announce the suspension of ‘all deliveries to customers in Russia,'” Jyske said. Bank. Anders Haulund Vollesen, analyst.

“Even though the mobile phone is for civilian use, an export license is required primarily due to the advanced encryption technology built into our products, and this applies to all countries,” the spokesperson said. ‘Ericson.

($1 = 11.1164 Swedish crowns)

(Reporting by Supantha Mukherjee in Stockholm; Editing by Toby Chopra)

((supantha.mukherjee@thomsonreuters.com; +46 70 721 1004; Reuters Messaging: supantha.mukherjee.thomsonreuters.com@reuters.net))

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