Hello, everyone, welcome to this second-quarter report 2021. Sending here from the studio in Kista. Together with me here in the studio is our President and CEO, Börje Ekholm, and our CFO, Carl Mellander. As usual, after the presentation, we will have a Q&A session, and this is important. In order to ask questions, you need to sign up via telephone. Details can be found in today's press release and on our website, ericsson.com. During today's presentation, we will be making forward-looking statements. These statements are based on our current expectations and certain planning assumptions, which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today's press release and discussed in this conference call. We encourage you to read about these risks and uncertainties in our earnings report, as well as in our annual report. With that said, I would like to hand over the word to you, Börje. Please, Börje. Great. Thank you, Peter. Good morning, everyone, and thanks for joining us at this video conference for the second quarter. We continue to see good momentum in our business, and it's based on the 5G rollouts, but also on market share gains. We saw organic growth of 8% during the quarter, and we could also strengthen the gross margin for the whole group to 43.4%. Before I step into the Q2 performance, I really want to highlight the efforts by our people to deliver this result during the second quarter, despite the global pandemic that we've been operating with in several of our markets. Today, it's also clear that we are a leader in the 5G area. We have a very competitive portfolio, and today we power 93 live 5G networks out of a total number of 169 globally. A few years back, we also made the strategic decision to try to de-constrain our supply chain, again, to be able to deliver to our customers. That means that we have invested in making our supply chain more flexible. During the quarter, we have had no disturbances in our deliveries, and we've been able to keep up with the demand we've seen in the market. I would say the ability to deliver in combination with the significant efforts or investments we've made in the R&D area, and combined, of course, with our strong efforts by our people, have allowed us to perform well despite a very challenging environment during the second quarter. Let me go through a couple of key highlights on our strategic execution during the second quarter here. We have continued to show great progress in our product portfolio, and it's highlighted by the addition of 5G mid-band and Massive MIMO support to our Cloud RAN portfolio. Cloud RAN is a critical element in our product portfolio, as this will enable our customers to evolve their networks toward a cloud-native architecture and open network architecture, leveraging automation and fully autonomous networks. Ericsson has always been and always will be a strong believer in openness in mobile networks, and we will work in close partnership with our customers to leverage the benefits of the open architecture. We take the same approach to Open RAN solutions, and we are actively participating in the standard bodies in Open RAN. We also continue to see great momentum in the U.S., driven by strong demand for our 5G solutions. We expect this to continue as 5G is rolled out across the nation. This was further highlighted, of course, by the signing we had this morning of a SEK 71 billion five-year contract with one of the largest operators in the world, and it's Verizon, of course. This is the largest contract in the history of Ericsson. On the IPR side, we continue to see good momentum in signing up new licensors. During the quarter, we signed an agreement with Samsung that we believe is a very attractive agreement for us, and it confirms the value of our portfolio. What we have also seen is that momentum continues with signing additional contracts here during July. Despite the signing of the Samsung contract, which also included revenues attributable to the first quarter, we saw a decline in total IPR revenues of about half a billion kroner. We have previously communicated that there was a high risk that we would be allocated a lower market share in China due to Sweden's decision not to allow Chinese vendors in the Swedish 5G network. This can, of course, lead to a significantly lower market share going forward compared to what we have today. When we look at the second quarter, we have seen that our sales in mainland China have fallen by about SEK 2.5 billion, which is a 60% reduction compared to Q2 last year. We don't really know the definite outcome of the tenders that are ongoing. We want to say that it's prudent for you to already plan for a significant reduction in market share, both in Networks and Digital Services. Regarding Digital Services, we can see that the material loss in market share in mainland China would lead to a delay in reaching the targets in Digital Services. In addition, during this quarter, we have taken a write-off of SEK 300 million related to pre-commercial product development for the Chinese market. This is basically pushing out our ability to reach break-even, which we predicted before. I would comment on that. We had already decided to increase our investments in R&D in order to capture the 5G opportunities that we see in front of us. Now we expect a limited loss in 2022, but it will also be a bit back-end heavy. You will see stronger development in the second half as the new portfolio starts to generate significant revenues. However, we can also see that based on the strong portfolio we have in Digital Services and the strong momentum we have in the marketplace, we are going to, over time, compensate the Chinese volumes with other markets. We're going to see a path to exceeding the previous targets of 4%-7% EBIT margin that we set. It will take a bit longer than we earlier forecasted. Finally, I want to just highlight the work we do on ethics and compliance. We are sparing no effort in investing in our procedures, ways of working to make sure that we have processes that are fit for purpose. Most importantly, we're investing in creating a company culture where we are making sure that what happened in the past will not happen again. This is an area we're strongly committed to as a management team because we believe this is going to be a long-term competitive advantage for us. Let me now move into the market area performance. Starting with Middle East and Africa, sales declined by 10%. This is mainly due to lower 5G investments in the Middle East and an uncertain macroeconomic situation in Africa. Of course, this is to a large extent dependent on the COVID-19 pandemic. Despite the lower volumes in mainland China, we saw Northeast Asia growing by 1%, adjusting for currencies. This was driven mainly by Networks and the continued 5G momentum in other markets within the market area or other countries in the market area. The 5G momentum continued in North America, where sales increased by 11%. This was driven by both Networks and Digital Services. In Europe and Latin America, sales increased by 14%. If we break this down a bit, we can see that Europe grew 12% primarily due to market share gains, and we saw Latin America growing at 28%. That is a bit of a recovery compared to a very difficult second quarter last year that was heavily affected by the COVID-19 pandemic. Finally, in Southeast Asia, Oceania, and India, sales grew by 14%. That was primarily driven by significant investments in LTE and rollouts in India. I also want to say that we are seeing some concerns relating to COVID-19 in Southeast Asia, where many countries are heavily affected now, and we've had a very difficult situation in India that's now gradually improving, but we see other countries affected. We do believe we could see a risk of a slowdown in the general economies in Southeast Asia. If we then move on to business segments, Networks grew organically by 11%, despite the loss of volume in China and lower IPR revenues. This reflects our strong product portfolio, and it has allowed significant gains in market share outside of China. We continue to see good momentum as 5G is increasingly rolled out across the world. Gross margin increased to 47.9%, compared to 40.5% last year. Of course, that's supported by strong operational leverage. Also, as you may recall, we took a write-down of pre-commercial product inventory and initial 5G deployment in China in the second quarter of last year. In Digital Services, we saw double-digit growth in North America and Europe, while we can see that sales declined in the other market areas. For the full segment, sales were stable, and that's despite the reduction in volume in mainland China, as well as lower IPR revenues. Gross margin decreased to 37.9%, compared to 43.6% last year. That is to a large extent explained by the write-off that we did to pre-commercial inventory in China of SEK 300 million. That impacted gross margin by almost 4 percentage points. We see overall otherwise good momentum in the business in Digital Services, and we're continuing to execute on the plan. Of course, as I said before, the break-even point and the reaching of a 4%-7% target get pushed out because of lower volume in China. Our commitment to developing leading products here stands firm, and we're continuing to increase our investments in R&D, despite knowing that it will take one to two years before we start to see those product developments converted into revenues in the P&L. That will also allow us to grow outside of mainland China, which will, over time, compensate for the Chinese volumes. Sales in Managed Services decreased by 2% in the quarter, and that was due to lower sales as a result of the merger between two operators in North America, but also to planned contract exits in Europe. At the same time, we were able to increase gross margin to 19% from 17.2%. In Managed Services, we continue to invest in AI solutions for our customers, and that will further strengthen our competitiveness. In Emerging Business and Other, sales grew by 13%, and gross margin continued to strengthen. The most important part here is that we're continuing to deliver, and Cradlepoint is continuing to deliver according to our plans, and we perform well. We see that we now have offerings that can capture a good growth opportunity in the enterprise segment, which we forecast to grow by 20%-30% over the coming several years. We're very excited about the opportunities to further grow in that area. With that, I hand the floor over to Carl Mellander, our CFO. Thank you, Börje, and good morning, everyone, from Stockholm. We can really see that the strategy execution that Börje talked about is visible in our financials. If we look at the P&L here, you see again that reported sales are up to SEK 54.9 billion, which is an 8% growth organically, with growth in four out of five market areas, as we saw just now. This growth is mainly driven by the Networks business that grew 11%. We reached this growth in spite of the decline in China by SEK 2.5 billion that we mentioned earlier. IPR revenues ended up at SEK 2.3 billion. That's part of the top line here. It's a decline of SEK 0.5 billion. Of course, the quarter as such is a bit boosted here by the revenue coming out of the recently concluded Samsung deal, where we have revenues from both Q1 and Q2 included in Q2. On a four-quarter rolling basis, if you look at the graph on the bottom left, we are now around SEK 232 billion in top line. We continue on this picture to look at the gross margin, 43.4%, which is actually a 520 basis points improvement with strong improvement, as we saw right now from Börje, in 3 out of 4 segments. That's very encouraging. In Networks, it deserves to be singled out again. We saw continued operational leverage contributing to the higher margins with a very high gross margin at 47.9%, up from 40.5%. Digital Services reported a decrease in gross margin as a result of the write-down related to mainland China that Börje mentioned. Excluding that, gross margin would have ended up at 41.7%, a healthier level in the underlying business. The underlying gross margin deserves to be mentioned: 42.4% if you look at the four-quarter rolling basis, which is really more relevant as individual quarters can vary up and down. OPEX was SEK 17.4 billion in the quarter. As you see in the table, R&D and SG&A amounted to SEK 17.5 billion. Then we have a positive impact of SEK 0.1 billion related to impairments of trade receivables. SG&A was rather stable, as you can see, helped by currency, of course, but also impacted by the investments we make in compliance and security. The R&D side grew by SEK half a billion. It's really coming from the Digital Services investments we do now in our cloud-native 5G portfolio, as we have planned and communicated earlier as well. We shouldn't forget that Cradlepoint is performing on plan, but of course, also adding to the R&D and SG&A expenses. This results in an EBIT of SEK 5.8 billion, excluding restructuring and up from SEK four and a half a year ago. This represents a margin of 10.6%, which is an increase of 240 basis points year-over-year. Again, the gross margin in Networks is the big driver for this improvement on the bottom line as well. We have a graph there at the bottom also showing the EBIT margin on a rolling four-quarter basis. We are at 13.4%, which is well within the range of the 2022 target, which is between 12% and 14%. I can also add, which is not on the slide here, that the EBITDA target of 15%-18% that we have set for the long term can now be compared with the actual performance in four quarters, which is 14%. Let's look at how these profits then translate into cash flow. You can see here that cash flow from operating activities increased by SEK 0.5 billion, of course, supported by IPR payments coming into Q2 rather than Q1, but also offset by certain tax payments where last quarter benefited from tax refunds to the tune of SEK 0.7 billion. Here, I think the important thing is to talk about this working capital, where we really continue to focus on lead times and keeping capital efficiency in our company. Specifically, the focus on project deliveries and the whole credit-to-cash cycle has really enabled us to become more and more capital efficient, while at the same time growing the top line. This is, of course, something we will continue to focus on going forward as well. It's also important to mention, when we talk about working capital, the inventory piece, where we continue to monitor, obviously, the component situation and make sure that we have proper resilience so we can deliver on time to our customers, which we have done so far. Free cash flow thereby, before M&A, came out at SEK 4.1 billion. This is also an increase of SEK 0.8 billion year-over-year. Again, looking at the rolling profile here and comparing with long-term targets, we are now delivering free cash flow before M&A at 9.6% of sales. As you know, the long-term target that we have discussed is between nine and 12. We are within that range as well. When it comes to our cash position, net cash increased by SEK 0.7 quarter-over-quarter, coming, of course, from the free cash flow generated in the business, but also impacted or netted out by the dividend, part one, that was paid now, SEK 3.3 billion for the first half of the dividend payout. Net cash ended up at SEK 43.7. Gross cash also had a couple of movements. We are now up to SEK 77.1 billion. As you know, we issued a EUR 500 million, eight-year unsecured bond in the market during the quarter. We also utilized a loan commitment from the European Investment Bank during the quarter, about $300 million, which is also there to support our R&D in 5G. As a result of these events or actions regarding the debt portfolio, we have now extended the average maturity in the debt portfolio to four years from 2.2 years a year ago. Lastly, on this picture, I'd like to comment on return on capital employed, an important metric for us, which amounted to 13.5% now, compared with 9.9%. This is an increase, obviously, of almost four percentage points year-over-year. Again, a combination of improved profits and capital discipline. I wanted to say a few words about IPR. This period that we have had has been active when it comes to renewal renegotiations. Of course, we're very pleased with the renewal with Samsung. It's a global multi-year agreement, which again confirms the value of a patent portfolio. In addition to that, we signed up with one additional company for another renewal in July. That falls outside of the Q2 period, but is still important to mention here because it will impact the Q3 numbers. All in all now, our portfolio of license contracts amounts to SEK 7 billion on an annual basis. This is the starting point that you can see here in this bridge. Then there are a couple of factors that explain the difference, which is a question we often get, to the SEK 10 billion that we had in 2020, and I'll go quickly through them. Of course, we're exposed to FX movements here. That's the first bar here. We are impacted by the relative weakness of the US dollar against the Swedish krona. The other factor, of course, is the upcoming renewals of expired contracts that we are working on, as mentioned. The third bucket has to do with the fact that not all of the revenue in IPR is recurring. Some is non-recurring, and this can vary between quarters and from time to time. Finally, the fourth bucket is lower volumes from one of the licenses affecting the numbers as well. To conclude, we do feel confident that the leading position we have in 5G on the patent side will create a foundation for growing the IPR revenue going forward. I'm going to round off with a few words on the planning assumptions. First of all, it's encouraging to see that the Dell'Oro forecast for market growth has increased dramatically, I would say, from 3% in their January report to 10% now for 2021. You see here how that breaks down into different regions as well, with North America at 12%, Europe at 9%, and China at 11%. Regarding our own top line, I just want to remind you that the normal seasonality is +5% from Q2 to Q3. Again, I want to point out that this varies, of course, with big fluctuations between quarters, depending on the deployment. We talk about the risk of losing a significant market share in China, of course. Under the planning assumptions in the report, you can find the quarterly numbers of sales in China. Over to IPR here. I already mentioned that SEK 7 billion is the annual volume of contracts that we have. Gross margin, again, we're not guiding specifically on that, but just to reiterate that gross margin can vary quite a lot between quarters. Look rather at the rolling four-quarter. Last point, Digital Services. Considering the risk in China and also the fact that, which we've already said earlier, 2021 is an investment year for Digital Services, we now expect a similar earnings level in Q3 to that which we just delivered in Q2, while we expect Q4 to become break even on an isolated basis for Digital Services. With that, thank you, and back to you, Börje. Great. Thank you, Carl. Ericsson continues to be well-positioned to take advantage of the market momentum we see now as 5G is increasingly deployed around the world. We see the North American market moving very fast with a strong demand for 5G, and it will be a key opportunity now as the operators are building out mid-band spectrum that will be lit up at the end of the year. As you all know, mid-band spectrum and build-out in mid-band is critical to give the end-user experience that you can get from a 5G network. We are, of course, very excited about our position in the market and continue to work with the leading operators in North America to build out their networks. In Digital Services, we continue to see good momentum in 5G core, and we have here been gaining a footprint over the last few quarters. We also recognize that to capture the opportunities in front of us, we need to invest in R&D, and costs will come before revenues. We are continuing here, as Carl also highlighted, to ramp up our investments in R&D to capture the market opportunities. We will see revenue start to be generated from this portfolio, let's say beginning of next year, but then ramping throughout next year. We also see that with 5G being built out and as 5G is increasingly built out in mid-band, it will be a platform for innovation. That will especially be true for the consumer space, but it will especially be for enterprise spaces. We are very excited and we are strong believers that with 5G, wireless communication can, for the first time, be the primary choice of access technology for enterprises, and basically be the backbone of digitalizing enterprises for the future. We think this translates into a very exciting growth path for Ericsson. What we also see is that we are seeing strong momentum in the business, as we've already said, but also the investments we made in a flexible supply chain allow us to capture the growth opportunities in the market. It's thanks to the investment in a global supply strategy we've had for a long time that has actually allowed us to respond to customer needs very quickly and capture the extra demand that we see. When we look ahead, we see that we're well-positioned, that we have strong business momentum, and a competitive product portfolio. We feel very comfortable about the targets at the group level for 2022. With that, I think before moving over to Q&A, maybe you want to add something, Peter? No, I think we're all happy with the presentation so far. We'll move into the next phase of this presentation here from the studio. That will be the Q&A. With that, I would like to connect with you, Richard, so you can open up the Q&A. Thank you. Ladies and gentlemen, at this time, we will begin the Q&A session. If you would like to ask a question, please press 01 on your push-button phone. If you would like to decline from the polling process, please press 02. For the stream of the webcast, please mute the webcast audio while asking a question to minimize any audio feedback. Thank you, Richard. We have the first question here. It's from Edward Snyder from Charter Equity. Please, Edward. Good morning. Good morning. Thanks for the question. A couple of them, if I could, please. First off, you mentioned O-RAN. Even if we ignore the interoperability and system integration problems with a multi-vendor solution, which has never occurred before, it seems clear that a workable solution probably won't be ready for a year or two. It kind of begs the question of what the point of O-RAN is. If 5G is maturing in China in terms of the build-out, and the U.S. is committing now to systems for their deployments, it seems as if most of the big tenders will already be awarded and being built out before O-RAN even sees a practical solution. Would it be a 6G system, or is there some sort of market dynamic that's going to drive carriers to move from systems they use now to something that has not been used before and will have to be shaken out halfway through 5G? I have a follow-up, please. It's a great question, Ed. The reality is, clearly O-RAN is something that will happen, and that's what we are investing in as well. We see in reality the first step to be the Cloud RAN portfolio, as that will allow our customers to migrate towards an open architecture. It will take a few years before we have a fully operational O-RAN solution. We can debate how long it will take, but there is a question of here and now, of building out 5G coverage. That's what we also see our customers doing. Of course, we need to work with our customers here to make sure that they have the best solution. It could well be that O-RAN can have certain applications earlier, where you have fewer performance demands. For example, it could be rural coverage. There are pockets where we can see that coming. For sure, O-RAN will be a fundamental part of the 6G solutions. That's no question in my mind. Exactly how it's going to pan out in the meantime, I think, remains to be seen. It depends on how the technology matures, clearly. You said you had a follow-up, Ed, I think. Thank you. That does kind of dovetail with my next question. The U.S. is obviously in the ascendancy now in the 5G rollout, now that C-band auctions have been completed. If you look at the different segments, you've got a lot of spectrum to clear, so it's going to be a multi-year process. At the same time, I don't think the business plan has been proven well enough in China that you're going to see the same level of massive MIMO mix versus macro. Two pieces, if I could. One, do you see that the rollout in the U.S. will favor more of a macro cell approach initially with MIMO to cover capacity, and so you'll have a lower mix of the high-density stuff? Two, does this dynamic change if you look at, say, T-Mobile's Band 41 versus the C-band spectrum, which is higher? Do we have a better chance of seeing either MIMO or maybe even more macro in a 2.4 GHz environment than we do in, say, a C-band? Thanks. Thanks. What we see is that, of course, we need to build out a very big coverage and density of mid-band, because ultimately that is what's going to give the end consumer the user experience of 5G. Today, in many countries, we've been focusing on, call it, low-band build-out. In reality, that gives 5G coverage. In order to give the real performance benefits of 5G, you need mid-band, and you need carrier aggregation across different frequencies. We see right now that there will be a very big build-out, of course, of the C-band in North America. That is going to drive the market. We will see that build-out happening for sure. It's already starting to ramp; it will continue throughout the year and into the next year. After that, we will start, of course, to see densification of the network. That's the next step. Exactly how this will be depends on the customer, and their specific situations. I think that's a question best posed to them rather than me trying to interpret their strategies, and I shouldn't really do that. We are very excited about the process we see in North America and the build-out. By the way, we see similar activity in multiple countries, such as Australia, Japan, and the Middle East, for example. A lot of things are moving in the 5G world. Thanks, Ed, for those questions. Thank you. Thank you. We'll move to François-Xavier Bouvignies at UBS. Hello, Francois. Hi, good morning, everyone. Good morning. My first question is perhaps a clarification regarding China. When I look at your comments, you mentioned lower volumes due to delayed 5G deployment in China and a negative impact of SEK 2.5 billion in the quarter. My question is whether this SEK 2.5 billion delay is something you expect to recover in the second half of the year. Is this negative impact this quarter evidence of an existing market share impact—specifically, a negative share impact—because of trade tensions? I just wanted to clarify that, if that's okay. Yeah. No, it's not coming back. It depends, of course, on what the ultimate tender will look like and the distribution in the tender. We have said, and you see that we think it's prudent to plan for a significant reduction in market share. If that is the case, it's not coming back. What is the reality? It's very hard to say. We know the geopolitical tension with Sweden. We know what goes on there. What we see here is a reduction in the China volumes. We can speculate and we can have hypotheses, but the consequence is very clear on our sales volume. Be prudent enough; don't assume it's coming back. Okay, Francois. Okay. That's very clear. Thank you. Can I have a follow-up question? Yeah, sure. The follow-up is on Open RAN. Specifically, we are seeing a lot of projects in Open RAN, and the readiness is still not there. With Rakuten and Dish Network and other initiatives like Vodafone, which I think is one of your big customers, we saw recently, from what we see in the release of public statements, you don't seem to participate yet in this kind of project so far. I was wondering, what would make you change your mind, or what would be the trigger for you to participate more in Open RAN? Why don't you participate today with a big project going on with your customers? A couple of things are going on here. First of all, and this is often not thought about, but we're actually the largest contributor to the O-RAN ALLIANCE on standards. We're already very active in that. What we are doing now is recognizing that there's a need to build out 5G networks around the world right now. It's a here-and-now question where we believe the purpose-built networks can actually deliver the performance required in 5G today. We are simply saying, "Okay, by the time O-RAN is ready, we will also be there with solutions." We don't feel it's the right time right now to divert focus from what's actually happening in the market. Okay, François. That's very clear. Thank you very much. Thank you. Let's move to the next question from Peter Kurt Nielsen at ABG. Hello, Peter Kurt. Hey, Peter. Thank you very much and good morning, gentlemen. A question related to Digital Services, please. It would appear that profitability here is highly dependent on volumes in China. Could you elaborate a bit on that, please? Why do we seem to be so dependent on China as you update your guidance for Digital Services? Also, it would appear that you are investing or planning to increase your R&D spend more than previously anticipated on the 5G core side. Why is that? Have you seen increased competition that is forcing you to do this? Anything you can say to elaborate a bit on this, please? Just if I may, one follow-up: How have the lower volumes in China impacted the margins in Networks? It seems clear it's been negative in Digital Services. Has there been a positive impact on margins in Networks because of the lower volumes in China? Thank you very much. Okay. If we start from the end, no, it has not been positively contributing to the Network's margins in the second quarter. It is fair to say that in the second quarter last year, we had a write-off of pre-commercial development. We have a positive margin on what we ship in China. We would have had better margins in Networks with China volumes, to put it that way. Digital Services, no, it's actually continuing according to the plan we've been operating with. You know that we have been ramping up R&D, and of course, that takes a bit of time before you see it on the cost line. We have added resources throughout the year, and we are, to a much lesser extent now, adding additional resources. It's all according to the plan to make sure that we can capture the 5G core opportunities that we actually see and that we are tendering for. For us, this has been just part of the overall strategic plan for Digital Services. If you tack that on to the China volumes, you can understand that Digital Services is a business. It's software-like with a very high R&D intensity. Of course, any volume change is very important for our ability to deliver a margin. It is fair to say the Chinese volumes, if you look overall in telecom, they're probably 50% plus, 60% plus in many parts of the total global volume. Of course, we have a dependency on losing footprint in China that primarily hurts or is more exposed in Digital Services than it is in Networks. Okay, Peter Kurt. Okay, thank you very much. Thank you. We'll move to the next question from Aleksander Peterc at Societe Generale. Hello, Alex. Yes, good morning. Hope you can hear me well. Yes. Yes. Perfect. Good morning. Thank you very much, and thanks for the question. I would like to delve a little bit into your IPR, if I may. You provided a very helpful slide on this. Just to be clear, the $7 billion run rate that you now have is for the current year, up from $6.6 billion, if I remember correctly. This presumably reflects the deal you signed in July. Now, my question is really about the expired contracts. Do you still expect some of that to come back in IPR so we potentially get to somewhere around $8 billion going forward? And then obviously, FX is here to stay, let's assume, and lower volumes from Huawei are here to stay as well. We'll land somewhere lower, but is there still some catch-up that you would expect? While on IPR, if you could give us a feeling on how you think about the Apple negotiation, which is due by the end of this year. Do you have anything to say on that? Then just a second quick follow-up would be on the Verizon contract. How many years will that build over approximately so we can gauge how much it will contribute? Thanks a lot. Thanks, Aleksander. I can take that. First of all, the Verizon contract is over five years. As Börje said, it's the largest contract ever in Ericsson's history. That's a nice thing to announce today. When it comes to IPR, yes, certainly, we are working with the other not yet renewed licensees as well in order to get to agreements. We signed one in early July, so that is going to help revenues going forward, and there will be a catch-up effect in Q3 from that as well. We continue, of course, in the team to one by one settle the outstanding deals. When it comes to Apple, I would say it's far too early to talk about that. It will expire, as you say, at the end of the year. The parties will, of course, come together to resolve that in the best possible way. That's too early to comment on any specifics regarding that. That's great. Thank you very much. Thanks. Thanks, Alex. We'll move to the next question from Sandeep Deshpande at JP Morgan. Hello, Sandeep. Yeah. Hi. Good morning. Thanks for letting me on. My first question is, clearly, when you look at your Networks business outside China, your growth and market share gains are very significant. Are these share gains that you made two years ago or in the past, or are these new market share gains that are happening starting in the last six months associated with the geopolitical tension, et cetera, which is causing the share shifts between China and the rest of the world? I have a follow-up as well. Thanks. What you see now coming through in the numbers are mostly the wins we had some time back. It takes some period of time, depending a bit on the contract and the situation, for it to flow through. So far, the most recent wins have only a very limited impact on the numbers you see. I know this is a focus on the overall market share situation, if it's geopolitically driven. I would say it's, of course, very hard to separate the two. We see that we win market share in markets where all vendors are allowed, as well as we win in markets where only Western vendors are allowed. Our overall market share gain, surely, part will be contributed to the geopolitical situation. I would also say here, it's the strength of our product portfolio that allows us to be truly competitive against any competitor right now. You saw, for example, the recent win in Malaysia, where we were able to build out the national 5G network. It's a very important contract win for us as well, indicating that we can win market share in many markets. You had a second question, Sandeep? Yes, just a quick follow-up. Talking about the same geopolitical issues and the Digital Services business, given that you might not be able to have that 4% or 5% share that you currently have in that business from China, are there businesses within Digital Services, are there business units where you can now do reductions, et cetera? Digital Services has been promised to be profitable for a very long time, and it hasn't delivered as such. Now that there is a potential structural change in one market, whether there needs to be a further thought process on the cost structure within the Digital Services business. It's a good question and good thinking. I would say if you look at the product portfolio, it typically contains global products. Just because you lose volume in one market doesn't mean you can restructure in any way. In reality, it's just a loss of revenue. The R&D remains pretty much the same. For us, that's why we're saying very clearly that due to the delay or the risk of losing China volumes, it's likely that we need to push out reaching the targets. We need to compensate for the sales we lose in mainland China by growth in other markets around the world. That's why you see the push out now. I would say, from a strategic execution standpoint in Digital Services, we're continuing to deliver on the plan and on the objectives we set out a few quarters ago. Due to the geopolitical situation between Sweden and China, we're saying that will get pushed out now, and that's an unfortunate consequence, but we need to deal with it and develop the business in the other markets. I will also say that the good thing is we're seeing good growth in Europe and North America in Digital Services. We feel that we are going to grow into that loss of volume. Okay. Thanks, Sandeep, for those questions. The next question will come from Fredrik Lithell at Danske Bank. Good morning, Fredrik. Good morning. Thank you for taking my question. I hope you're all well. I just wanted to ask a little bit about Cradlepoint, which you acquired some time back. What is the status of that unit right now, and how do you expect and feel that it should progress going forward? When should we expect that this unit will no longer be heavily loss-making, but rather the opposite? Could you also talk a little bit about growth in that unit? Thank you. Do you want to take it? I'll take it, yeah. Thanks for the question, Fredrik. Cradlepoint is developing well. I must say, it's on track with the plans, basically following what we said from the start: that there will be a 1 percentage point impact on the EBIT margin in 2021 and 2022. As you saw perhaps in the report, it contributed now a bit positively from the final PPA calculation there. Now we are going forward. We are in good shape, I think, to deliver and grow that business also outside of the main markets where they have been successfully establishing a footprint so far. I think Cradlepoint is a well-performing asset in our family now, and it's great to have them on board. Is that going to be a hub for further acquisitions that fit into that type of portfolio product and services? What should we expect from this unit in terms of growth, and should it move out into the rest of the world differently than it did before? A little more, if you could, on the planning for that unit. You want to take it, Börje? I can start. Yeah. You're absolutely right. What we are seeing is that we can leverage the products. It's been predominantly sold in North America so far, with very limited presence outside. That is quite an exciting opportunity as well. We foresee growth to be quite good for Cradlepoint. What we're also seeing, you hit on that, is that it becomes a bit of a hub for developing new solutions that we can actually market through their network of distributors. We're very excited about the opportunity we create with the acquisition of Cradlepoint to capture a larger and increasing share of the enterprise market. We should also recognize that Cradlepoint is one piece that we need for enterprise. We're also looking at other growth opportunities in enterprise, including dedicated networks for corporations, campus networks, and our global connectivity platform, IOTA. There are a couple of additional opportunities. We believe the market opportunity in enterprise is so large that we need to increase our investments in that area by also looking at broader acquisitions outside of Cradlepoint. Okay. Thank you. Very clear. Thank you. Thanks, Fredrik. The next question is from Dominik Olszewski from Morgan Stanley. Hi, Dom. Yes. Good morning, everyone. Thanks for taking the questions. Two of them. From the Q2 revenue run rate that you're indicating, it looks like there's basically SEK 5 billion downside to sales in the second half from China. It'd be sort of pro rata what we've seen in Q2. Could you please maybe talk about the regions and projects which could help mitigate that downside in the second half, so other areas? Obviously, for example, overnight, you've had Dell'Oro Group raising estimates for the rest of the world, North America, globally. A second question is, in the past, you've talked a lot about labor shortages, particularly in North America for tower crews. Obviously, today we're in an inflationary backdrop to talk about labor shortages in certain regions. Could you talk about whether that's a constraint on deployment in the second half and into next year? Maybe I'll take the first one first, because no, actually not. The labor shortages that we talked about before were really about rollout crews, feet on the ground, which was actually limiting our volumes. We don't see that as a limiting factor now. I think it's rather the site acquisitions from customers that determine the speed. As you see, speed is very high at the moment. We have sorted that problem out. If you look at our numbers, you see that we have grown. If you take Networks, for example, or even the total company, we've had an organic growth of 8%, despite losing 60% in China volumes. We are growing in many markets for really two reasons. One is the build-out of 5G drives demand, and that drives increasing demand, but also that we've been able to gain market share. We started to talk about that already in 2018 or end of 2017. That is something that we have systematically invested in to make sure that we can gain scale outside of China as well. We believe that will contribute and help us to continue to grow, even if the risk is very high that we will see significant loss of market share in China. That's probably the best we can look at it now. If you look at Q2, you'll still see that even excluding China, we have a very healthy development in the business. Okay, Dom. Thank you. Thanks for those questions. We'll move to Dominik Olszewski. No, sorry, that was the previous one. Amit Harchandani from Citigroup. Hello, Amit. Good morning, Peter, and good morning all. Amit Harchandani from Citi. Two questions, if I may. My first question is on the topic of Networks margin. You have delivered solid margins this quarter, last quarter, indeed across 2020, versus your long-term, or rather 2022, guidance of 16%-18%. Given what we've seen in China in terms of volumes and maybe potentially profitability profile of the Chinese business, is it fair for us to assume that the Networks margin going forward is more sustainable on average at the levels that we have seen over the past 4-6 quarters? Or are there any factors which could still take you down to that 16%-18% range? Your thoughts on that would be appreciated. I have a follow-up. Thanks, Amit. Should I start, Börje? Yeah. On the Networks margin, I think what we see is the result of work in R&D mainly, where we are able to design out the cost of the product and make it both, of course, attractive from a feature functionality point of view for the customers, but also manage the cost situation. You see the fruit of that in the ever-improving gross margin. We don't see any particular reason why that logic would change over time. As we always point out, of course, individual quarters can change here and there because of how deployments are made and so on. Basically, I think our aim is to establish a stronger and stronger logic there with the cost side on the one hand and the competitiveness leading to the price side and in Networks to continue on good levels. You had a follow-up, Amit, you said, or a second question? Yes, I did. My second question is, with regard to what you're seeing in China, while the development is not ideal for you, I'm trying to understand what you're hearing on the ground in terms of your customers and partners. If you're going to lose share, do you get the impression that it's going more to domestic competition? Do you get the impression it's foreign competition? Do you get a sense that they might be lobbying on your behalf and their way back into China? What is the feedback on the ground that you're getting, and what's the level of confidence that this might potentially even turn in your favor in the future? There is an ongoing tender process right now in China. It's a bit hard to speculate where that is going to go. Normally, the way they go, it's hard to know where you end up. You have also seen there have been indications that would result in us significantly or getting a significantly lower share, and that's a bit what we point to. I think it's easier to comment on these things or more appropriate to comment on these things once we know how the tender process will fall out. What we know, and it's the same thing across the world, is that if you look at the performance of our products, in field performance, it is very good. We have a competitive portfolio. We are gaining a footprint in other markets. We, in that sense, feel that we have a strong proposition to customers. Let's discuss more about the China situation once we're through with the tender process. Okay, Amit, thank you very much for those questions. We'll move to today's last question. It's from Daniel Djurberg at Handelsbanken. Good morning, Daniel. Good morning, and thank you for letting me in. I have two questions, if I may. Starting with the network gross margin, it was negatively impacted by a write-down of pre-commercial product inventory. My question is, was this related to mainland China? Yes. If you see limited or lower volume in the current tender, how significant is the inventory write-down risk, or was your write-down in Q2 also related to possibly lower volumes ahead? Also, if I may, a question on China again: out of the $1.5 billion in revenue you had in the quarter, how much would you say is recurring to existing installments, software, et cetera, and how much is related to previous 5G deployments that will, so to say, disappear when done? It would be great to know. I guess you mean the write-down, you mean on Digital Services, right? Not on Networks. Yeah. Yep. Okay. Exactly. Your second question there, how much is recurring? There is, of course, a portion of support revenue for the installed base. We have to follow what happens with that. It's hard to determine exactly. As Börje said, let's await the conclusion of this, and then we can comment on how it played out, basically. On the other question, of course, we always scrutinize our balance sheet and make impairments if we need to every quarter. Now, in Digital Services, we arrived at the conclusion that this $300 million write-down was the appropriate thing to do given where we are on that pre-commercial inventory. Now, of course, our balance sheet is what it is for the situation we have now, and we would have to consider that going forward. No material write-down risk that we see today in that context. It's worth saying that for the rest of the business, it's global products again, so that kind of helps. It's really only when you have market-specific products, and that's what we have in this case. Exactly. That's perfect. If I may, only the very last question would be about Japan. Obviously very strong again this quarter, making up for China's weakness quite a lot, I would say. Should one be worried post-Olympics or something, or do you expect this strength in Japan to continue into the second half or in 2022? Is it something that starts to fade? Yeah. I don't think the Olympics have actually had an impact on this. It's more the need for the operators, first of all, to build out 5G to start to develop applications on top of, and for the capacity need they have in the network to cope with the increasing traffic volumes. There are always going to be a few swings between quarters in individual markets, but I would not say I would hang it up on the Olympic Games. Okay, great. Thanks, Daniel. Before we close today's call or video call, I would like to actually hand over to Börje for any closing remarks. Thanks, Peter, who is appropriately dressed in a tie today. Anyway, we're very excited about our market momentum, and it has continued during the second quarter. What we're more excited about is actually that 5G is gaining momentum around the world with increasing build-outs, and it's a here-and-now question. With the investments we made in the product portfolio, making that a competitive offering to our customers, as well as a competitive cost position that we've established over the last few years, we feel that we are in a strong position to capitalize on this increasing demand for 5G. We're very excited about the future, the second part of this year, but also into 2022. Thank you. Thank you.