The vendor's forecasts estimated costs in Q4 of around $687 million (€596 million) to ‘reshape’ the BSS business.
Half of the costs will be related to restructuring and others include customer compensation payments, provisions for project delays and the write-down of intangible assets. Job losses related to the restructure are expected in 2019, Ericsson said.
Ericsson’s BSS strategy had been to pursue large transformation projects based on pre-integrated solutions, including the development of the full-stack Revenue Manager BSS platform. The company said this week, “The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialised.”
Delays in product and feature development for Revenue Manager have contributed to the problem, Ericsson admitted, adding that some complex transformation projects have experienced delays and cost over-runs.
Ericsson noted that having R&D resources focused on the full-stack Revenue Manager has also caused delays in other areas of the business.
Ericsson’s revised BSS strategy includes increased investment in the established Ericsson Digital BSS platform. The company will only fulfil existing customer commitments for the Revenue Manager product.
A statement said, “Focusing on the established and competitive billing, charging, mediation, order management and catalogue portfolio, with an existing large installed base, will strengthen Ericsson’s BSS business.”