S&P lifts Ericsson from junk

Standard & Poor's said it raised its long-term corporate credit and senior unsecured debt ratings on Ericsson to BBB- from BB+ following publication of the group's fourth-quarter and full-year 2004 results and reflecting S&P's review of the medium-term outlook for the mobile network systems industry.

The outlook is positive.

At the same time, S&P raised its short-term corporate credit rating on Ericsson to A-3 from B.

S&P said Ericsson's return to the investment-grade category after the most challenging crisis yet seen by the telecoms industry over the last three years reflects the reversal of fortunes of the mobile systems market due to the unrelenting expansion of mobile communication technologies worldwide, in addition to the group's successful implementation of a very severe cost restructuring program.

Furthermore, the mobile systems market is on a low growth trajectory and Ericsson is strongly positioned to benefit from this over the medium term given its leading market positions in key second- and third-generation mobile network systems technologies and its dramatically lower-cost break-even point, the agency said.

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