Ericsson services unit head to be new CFO

STOCKHOLM, SWEDEN: Ericsson, the world's top mobile telecoms equipment maker, appointed its current head of Global Services as chief financial officer on Monday in a widely expected move.

Jan Frykhammar replaces Hans Vestberg, the current CFO, who in turn will take over as Ericsson's chief executive when Carl-Henric Svanberg leaves the firm at the end of the year.

With a tough market environment finally catching up with Ericsson in the third quarter and Svanberg on the way to BP, Frykhammar is seen as a steady pair of hands.

"It's the safe choice. This is a long-timer in the company. Frykhammar is the name one has heard mentioned most often in speculations," said Hakan Wranne, analyst at Swedbank.

The company faces significant challenges over the short term as the global crisis has sapped demand for its core network products.

In the longer term, a surge in mobile voice and data traffic is adding to network bottlenecks, meaning telecom operators cannot put off investment for ever.

Also positive for Ericsson is the growth in professional services -- for example where operators outsource the running of their networks -- which now make up around 27 percent of sales.

Frykhammar said he expected that over the longer term, the professional services market should grow around 10 percent a year.

"Over the next couple of years we believe the sector will continue to show good growth, even if, in the short term, there are elements of the market that go better and some that go worse," he told Reuters.

Ericsson has not brought in a CFO from outside the company since 1985.

Frykhammer joined Ericsson in 1991. From 2002 to 2004 he served as CFO for Ericsson in North America. He will remain head of the Global Services unit until a successor has been found.

Ericsson shares were down 1.4 percent at 0946 GMT, underperforming the Stockholm blue-chip market .