Ericsson (ERICb.ST) announced a noncash impairment charge of 11.4 billion Swedish crowns ($1.09 billion) for Q2 2024, marking the second writedown on its Vonage acquisition. This charge is due to lower anticipated market growth in parts of Vonage’s current portfolio. Ericsson acquired Vonage, a cloud communication firm, in 2022 for $6.2 billion.
Niklas Heuveldop, CEO of Vonage, stated that market deterioration and strategic investment refocusing prompted the reassessment. Despite this, Ericsson remains committed to building a Global Network Platform for network application programming interfaces (APIs), the initial strategic goal of the Vonage acquisition.
Previously, Ericsson recorded a 32 billion Swedish crown impairment charge for the acquisition in 2023. Vonage continues to operate as an independent unit, with Heuveldop appointed as the Head of Business Area Global Communications Platform and CEO of Vonage earlier this year.