The Swedish telecoms giant believes most of its revenue will come from China after the launch of 3G licences Swedish telecommunications networks giant Ericsson hopes the launch of next-generation mobile networks by Chinese carriers will make the mainland the company's largest revenue contributor. In an interview with the South China Morning Post in Guangzhou, Ericsson president and chief executive Carl-Henrie Svanberg forecast that with the looming issue of third-generation (3G) mobile licences by the Chinese government, China would soon replace the United States as the company's biggest market. 'It depends on when the Chinese government makes up [its] mind on 3G. It think it is likely that sooner or later China would pass [the US to be our biggest market],' Mr Svanberg said. The US market accounts for about 15 per cent of Ericsson's revenue, followed by China's 8 to 9 per cent group contribution. However, for China to take the top spot present revenue levels would have to double at least. With the anticipated strong growth in China, Ericsson would continue to increase its investment in the mainland despite cutting its workforce elsewhere. At the end of September, it halved its workforce to 53,400 from 107,000 a year ago. This figure will drop to 47,000 by the third quarter of next year. Despite this, Ericsson said it was on track to double its investment in China to US$1.2 billion by 2006. As of 2001, it had spent US$600 million in the country. 'We do it because it has good returns, not for any other reason. Not because of any political reasons. Just because it has very good returns and people are skilled and it works fine,' Mr Svanberg said. He said Ericsson's China investment was growing faster than in the rest of the world. Ericsson, which last month reported its first quarterly profit since 2000, excluding restructuring charges, said the roll-out of 3G networks by global carriers would be key drivers for the company's future revenue growth, along with strong organic growth in the mainland. Mr Svanberg said the company was expected to make a small loss after booking 3.8 billion Swedish kronor (HK$3.73 billion) in restructuring charges. Excluding the charges, operating profit would grow heavily in the fourth quarter. With about 250 million mobile phone users, China became the world's largest market in August. However, he warned the Chinese government not to delay issuance of the 3G licences beyond next summer or the country would fall behind its global peers and discourage foreign companies from going to the mainland due to a lack of information and communication technology infrastructure. 'For China [to draw foreign investment], I think it is not good to fall too far behind,' he said.