Ericsson's Indian Manufacturing Push: Antennas, Ambitions, and the 5G Future

The global race to dominate 5G infrastructure has taken a decisive turn as Ericsson, a telecommunications giant, doubles down on its manufacturing footprint in India. By localizing production of critical 5G components—specifically antennas and radio equipment—the company is positioning itself at the heart of India’s digital transformation. This move, blending strategic foresight with economic pragmatism, underscores the growing importance of "Make in India" initiatives and the region’s role as a hub for cutting-edge telecom infrastructure.

The Manufacturing Expansion in Detail

Ericsson’s flagship Pune facility, operational since 2016, now serves as the cornerstone of its Indian ambitions. In collaboration with Jabil, the factory manufactures 4G and 5G radios, including the AIR 3219 and AIR 3268 Massive MIMO antennas, which are critical for high-speed, low-latency 5G networks. By 2023, Ericsson had already localized all passive antenna production for India, reducing reliance on imports and ensuring timely supply to telecom giants like Bharti Airtel and Reliance Jio.

The expansion has created ~2,000 jobs in Pune and forms part of a broader strategy to establish a technology center focused on product development, testing, and supply chain optimization. This center will support early-phase products and operational readiness, enabling Ericsson to accelerate 5G deployment across India.

Strategic Rationale: Why India?

1. 5G Growth Engine: India’s telecom sector is booming, with 270 million 5G subscriptions as of 2023 and projections to hit 690 million by 2028 (Ericsson Mobility Report). Operators like Airtel and Jio are racing to expand coverage, driving demand for Ericsson’s equipment.
2. Supply Chain Resilience: The Pune facility is a linchpin of Ericsson’s geographically diversified production model, mitigating risks from global trade disruptions. CEO Börje Ekholm emphasizes that proximity to customers ensures agility in meeting demand.
3. Export Potential: After fulfilling domestic needs, India-manufactured antennas will be exported globally, capitalizing on cost efficiencies. This aligns with Ericsson’s existing footprint in Mexico, Romania, and China.
4. Government Synergy: Ericsson collaborates with India’s Department of Telecommunications to advance Digital India, including initiatives like fixed wireless access (FWA)—projected to connect 100 million households by 2030—and 100 accredited 5G use-case labs.

Market Dynamics and Challenges

Despite these strengths, Ericsson faces headwinds:
- Sales Declines: Ericsson’s Southeast Asia, Oceania, and India (SEAOI) sales fell 17% YoY in Q1 2025, due to reduced capex by Airtel and Jio, who now prioritize monetization over infrastructure spending.
- Competitive Pressures: Chinese vendors like Huawei and ZTE remain formidable rivals, though Ericsson’s compliance with "Make in India" policies and local partnerships (e.g., with Volvo on industrial 5G) offer a counterbalance.

This visual highlights the YoY decline, contextualized against the broader market slowdown post-5G rollout.

Investment Implications: Risks and Rewards

• Short-Term Concerns: Near-term revenue pressures are undeniable, exacerbated by operators’ focus on FWA and rate hikes. However, Ericsson’s cloud software and services sales grew in SEAOI, signaling a strategic pivot toward recurring revenue streams.
• Long-Term Bet on India: With 22,000+ employees and R&D hubs in Bengaluru (including a Global AI Accelerator), Ericsson is deeply embedded in India’s tech ecosystem. Its 6G research teams and partnerships with institutions like the Indian Institute of Science position it to lead next-gen connectivity.
• Exports and FWA Growth: The Pune facility’s surplus capacity and India’s 90% 5G coverage (achieved through rapid operator-led deployment) create export opportunities. FWA’s expansion—currently at 6 million households—also fuels demand for Ericsson’s fixed wireless solutions.

Conclusion: A Strategic Pivot Paying Dividends

Ericsson’s manufacturing expansion in India is a masterstroke, blending immediate market needs with visionary long-term goals. Despite short-term sales headwinds, the Pune facility’s scale—supporting 270 million 5G users, 2,000 jobs, and export potential—anchors Ericsson as a pillar of India’s digital economy.

The company’s 48.5% adjusted gross margin in Q1 2025 (a record high) and partnerships with Vi (post-debt restructuring) signal operational resilience. Meanwhile, its role in enabling 100 million FWA connections by 2030 aligns with India’s USD 7 trillion economy target, making Ericsson’s Indian bet a critical part of its global strategy.

For investors, this is a story of strategic patience: short-term volatility is outweighed by India’s 5G trajectory and Ericsson’s position as a trusted partner in a market where 90% of the population is now within 5G coverage. As 6G research and industrial metaverse applications (e.g., Volvo’s Bangalore trials) gain momentum, the Pune factory’s expansion is not just about antennas—it’s about building the backbone of India’s digital future.