Hello, good morning. Welcome to the Ericsson Third Quarter 2021 Call. Today's call will be a little bit different from others. We will start with the normal procedures, going through the Q flow numbers. The second part, we will actually spend a little bit on strategic topics. One, addressing the path to profitability in Digital Services by Carl, then we will address the opportunities that we see in Enterprise by Börje. With me here today, as usual, I have our President and CEO, Börje Ekholm, and our CFO, Carl Mellander. Hopefully anyway, even though we'll have this little bit longer presentation, hopefully we can spend the second part of this hour on Q&A. In order to ask these questions, you need to contact or connect to the conference via a telephone, and you could find all the details in the press release or on ericsson.com. During today's presentation, we'll be making forward-looking statements. These statements are based on our current expectation and certain planning assumptions, which are subject to risk 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 all 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 to our President and CEO, Börje Ekholm. Please, Börje. Thank you, Peter, and of course, welcome everyone, and very happy to have everyone joining us for this call. The third quarter, we're very happy about the performance that we can deliver based basically on us winning footprint across our portfolio, leveraging our strong 5G portfolio. I would say that this ability to gain footprint is clearly based on our investments in technology leadership and the substantial commitments we have made to growing our R&D efforts over the last few years. I would say it's also a show of the commitment our people show to deliver a performance that actually are on the path to becoming a really strong performance in the future. Today, we have 95 live 5G networks. We have 149 commercial 5G agreements across our portfolio with unique operators, I should say. You have also seen that we have decided to delay our Capital Markets Day, our investor update, to instead next year have a full Capital Markets Day with a full management team to participate and update you more in detail of the plans we see going forward. We will spend, as Peter said, a little bit of time on updating you all on our strategic thinking at the end of this presentation. Carl and I will focus the first part here on the Q3 performance and go through a bit more in detail. If we look at the quarter, we continue to see very good momentum in the U.S., and it's underpinned by our recent signing of a 5G contract with AT&T, which now means that we have 5G contracts with all three tier one U.S. operators. These contracts are, by the way, the largest in our history at Ericsson. We also continue to gain market share overall. However, it's quite clear that our market share in mainland China has been reduced, and this is a consequence or follows the decision Sweden took to exclude Chinese vendors in the build-out of 5G networks in Sweden. This is fully in line with the guidance we have offered before. We also see that we've been able to partly offset that loss of market share by growth in other markets during the quarter. We've seen good growth in Europe and Latin America as well as North America. I also want to highlight that also Africa saw growth following a very difficult period during the pandemic. Of course, it's quite clear the loss of sales in China hurts our sales volume in total. We need to invest even more to regain that loss of volume by growing in other markets. This quarter also, I would highlight the impact on disruptions to our supply chains that I would say impacts many companies across many different industry sectors alike. For us, we have had very limited to no impact on our customers up until the end of the third quarter. We've taken very proactive efforts, and we have built inventory and created, in a way, a flexible supply situation. Late in the third quarter, we saw some impact on shortages of individual components. Basically, that resulted to loss of some sales, but it resulted also in higher inventory. This is a risk that we see can have an impact also on the fourth quarter, of course, or it's highly unlikely it would have no impact, but it would have some impact that we think is likely. Despite the share gains we've had outside of China, the reduced market share in China and the supply issues and lower sales in Managed Services led to a slight negative organic growth rate overall, so we're - 1%. If we exclude China, we saw a 6% organic growth year-over-year. We also continue to deliver a strong profitability. Gross margin improved sequentially as well as year-over-year, and it reached 44%, and our EBIT margin increased to 15.7%. On IPR, we saw also good progress, and we increased our IPR revenues to 2.6%. This was driven by new agreements as well as a dispute settlement. Both have some retroactive financial impact, as we have said before. What we see also is that the significant value of our product portfolio and strong technology position in 5G positions us very well to conclude on future. Well, ongoing as well as future patent license renewals. We feel quite strongly about our position in IPR. However, you all know that timing of these license agreements may cause temporary gaps in our overall IPR revenues, but we will not waver from trying to maximize the value of our existing patent portfolio. We have very strong cash flow, and the free cash flow before M&A was SEK 13 billion during the quarter. I would say this is primarily a result of the investments and the commitment we have done in our strategy to improve flexibility, reduce sensitivity to business mix, as well as lower our working capital needs. We have now built a robust cash position and gives us a strong foundation to grow by investing further in technology leadership, but also from inorganic moves. We have a strong commitment to sustainability, you all know that, and it continues to deliver good value for us, but also for our customers. You saw that we just recently launched a new Massive MIMO portfolio that has gains on energy efficiency. It's much less heavy, and it has a lower wind factor. All in all, providing clear values to our customers. We also saw that during the quarter, we signed a SEK 2 billion sustainability-linked revolving credit facility. Finally, I want to say our commitment to strengthening our ethics and compliance program continue. This is a longer-term journey. We are committed to invest what it takes, and we are increasing and carrying significant costs in improving our ethics and compliance programs. It's also a cultural journey for us as a company. Here we are firmly committed to ensuring that we have created a culture built on integrity as a fundamental value. Now let's move on to the market area performance. Sales in Northeast Asia fell by 33%. That is, of course, due to the significantly lower market share in Mainland China. Sales in other parts of the market area actually improved during the quarter. As a consequence of the loss of sales in China, we have to right size our sales and delivery organizations in China, and that will start in Q4. We will have some structural cost or restructuring cost to that. In Southeast Asia, Oceania, and India, sales decreased by 16%. This is really due to a lot of accelerated rollouts in the end of last year for Networks, but also some timing of orders and projects in Digital Services. If you look at Middle East and Africa, sales declined by 8%. In Networks, we saw the primary impact of timing of 5G contracts in Middle East. I would also say that Africa clearly returned to growth. We see primarily in Digital Services, we saw actually a strong software upgrades in the African market. In Europe and Latin America, in total, sales increased by 9%. If we look at the parts here, Europe grew by 5%, basically on the back of market share gains. The same thing in Latin America, we saw a 29% growth. Of course, it's coming off a very difficult period in COVID, but it's still growing very strongly on the back of our share gains. We see that in both Networks as well as in Digital Services. 5G momentum in North America continued, and sales increased by 13%. Clearly, this demand is driven by a demand for 5G solutions. Let's now move on to the business segments. If we start with Networks, of course, sales was hit by China. If we adjust for mainland China, sales actually grew by 8% year-over-year. This reflects clear gains in other markets that have been possible thanks to a strong product portfolio. We continue to see very good momentum in deployment of 5G around the world. Of course, the impact on the supply chain from the disturbances also, of course, hit networks, and we expect that to pose a challenge as well during the fourth quarter. Nevertheless, we saw gross margin strengthen to 47.8% compared to 46.7% last year. In Digital Services, it's very encouraging that we now are starting to see revenues from the 5G contracts, and that's, of course, helping them to achieve some growth. We saw the segment grow by 1% in the quarter, and that's despite a significant reduction in mainland China. If we exclude China, sales actually grew by 6% year-over-year. Gross margin was 42.3% compared to 43.5%, and going forward, we expect profitability to improve gradually, and it's going to exceed our initial target of an EBIT margin of 10%-12%. Sales in Managed Services decreased by 7% organically. Clearly here, Q3 was impacted by reduced variable sales, contract rescoping, as well as some planned exits, mainly in Europe. We also saw that network optimization grew primarily in Europe, we continue to invest in developing our portfolio with AI and automation to further strengthen our competitiveness. Gross margin decreased to 18.7% compared to 20.1% last year. In Emerging Business and Other, sales grew by 4% organically, gross margin actually increased very strongly to 39.4% compared to 30.5% last year. Reported sales grew by 26%, that's, of course, mainly due to the acquired Cradlepoint business. What I would say here is this strengthening of the gross margin actually came out of, or is to a very large degree explained by Cradlepoint, it's even encouraging to see that Cradlepoint is one of the key drivers of the overall strengthened gross margin for Ericsson as a group. With that, I want to go over to Carl to go through more details on the report and give some more perspectives on our path to profitability in Digital Services. Carl? Thank you, Börje. Thank you. Let's have a closer look at the numbers then. Reported sales SEK 56.3 billion, negative organic development then of 1%, as Börje described, and this is following four consecutive quarters of organic growth. You saw the two largest market areas presented growth in the quarter and the remaining three ones saw a decline. We had some disturbances, of course, in the supply chain, as Börje also mentioned, but the big factor here when it comes to top line is clearly mainland China and the reduced market share there. In addition to what Börje said, that we would have grown 6% in the quarter if we excluded mainland China. The corresponding year-to-date number there is 10% growth if China is excluded. On IPR then, SEK 2.6 billion in revenue. Out of that, we have certain retroactive benefits from the contracts or agreements that we signed in the quarter. It is an increase of 0.5% year-over-year in IPR revenue. On a rolling four-quarter basis, our sales is now tracking around SEK 231 billion. Börje showed gross margin numbers per segment. If we drill a little bit further into this, 44% on the group level, that's up 80 basis points, really based on continued improvements both in the Networks and as well as the Emerging Business and Other segments. In Networks, pleased and encouraged to see continued operational leverage contributing to the margin here, but also the higher IPR revenues, as we said before, and the gross margin in Networks then now at 47.8% compared with 46.7%. In digital services, gross margin, excluding restructuring again, declined 120 basis points, and this is really connected again to what we have discussed before, the higher costs for initial deployment in the 5G Core contracts. Sales there, I must say and again emphasize, sales in 5G Core is really progressing well, and we'll come back to a little bit of a deep dive into that a bit later in the call. On Managed Services gross margin, again, excluding restructuring, declined by 140 basis points, and this mainly comes from a reduction of variable sales on a few customer accounts. Lastly, Emerging Business up 9 percentage points in gross margin fueled by, to a large extent, development in Cradlepoint. Of course, Cradlepoint did not exist in our numbers a year ago. OPEX, as you see, SEK 16.4 billion, up from SEK 15.9 billion a year ago. Again, mainly related to the addition of Cradlepoint business, both in R&D and SG&A. When it comes to R&D, the increase there, in addition to Cradlepoint, comes from more investments into the 5G Core portfolio in digital services, as we have reported on before as well. There is one line not visible on the slide here, but it's on other income and other operating income and expenses, where we had a positive development in the Ericsson Ventures investment portfolio this quarter. The net of that positive development and an impairment contributed with SEK 0.4 billion to EBIT. This is all in Emerging Business and Other segments. EBIT then ending up at SEK 8.8 billion or a margin of 15.7% in the quarter, which is up 10 basis points year-over-year. This, remember, is in spite of the lower sales volume. EBITDA, as you know, our EBITDA long-term target is 15%-18% of net sales. We are now, if we look at the rolling four-quarter basis, hitting 14% EBITDA margin. Tax is SEK 2.5 billion in the quarter and an effective tax rate of 30%. This is also effective tax rate for the full year- to -date. Now let's look into how these profits converted into cash flow. Operating activities cash flow increased by SEK 9.4 billion to a total of SEK 14.7 billion. We can also remember that last year, Q3 was impacted by a SEK 2 billion contribution to the Swedish pension fund. We work a lot with working capital in our company. We focus a lot on lead times and efficiencies. You can see that also this quarter, the resulting free cash flow benefited from that working capital work that we put in. We had good collection from customers, including some prepayments as well. As Börje also mentioned, we did increase inventory again. This is something we have talked about on previous calls also, in order to create even higher resilience in the supply chain. That was actually offset, partially at least, with higher trade payables. The impact on cash flow was not that big. CapEx net and other investing activities was relatively stable year-over-year. That all resulted in a free cash flow of SEK 13 billion, up more than 200% year-over-year. Maybe again, on the rolling four-quarter basis, free cash flow before M&A was now SEK 31.3 billion, which corresponds to 13.6%. Again, that's beating then our long-term free cash flow generation target, which is 9%-12% of net sales. This all meant that our gross cash and net cash increased by SEK 11 billion and SEK 12 billion respectively. If we move on to planning assumptions here finally on the quarter then. First of all, starting with the market that we operate in. Dell'Oro now expects the RAN market to grow by 13% in 2021, which is up then from the 10% that was estimated in the May report. If we break that down by region, some of the regions then, China 13%, North America 15%, Europe 10%. Looking ahead into 2022, the Dell'Oro forecast for the RAN market is to grow by 2%, or 3% if we exclude China. Second point on the supply chain. We saw some disturbances in the third quarter as mentioned, including some individual component shortages. We continue to see this as a risk going into the fourth quarter as well for Networks sales. Over to IPR, we have a run rate in the current portfolio of SEK 7 billion. This is the same number as we stated in the Q2 report as well. It is the contract portfolio currently on an annualized basis. Again, as we have discussed many times before, as these key IPR contracts are approaching expiry, we may see an impact on revenues until those contracts are actually renewed. Lastly then on Digital Services, we expect to reach break even in the fourth quarter. Now having gone through the quarter as such, I would like to shift gear and say a few words about Digital Services and the road back to profitability in this segment. To start with, as we communicated already in the second quarter report, now we expect a limited loss in 2022. One impacting factor is again the decreased market share in mainland China. The long-term target, 10%-12%, remains. Of course, our ambition is to even exceed that over the longer term. Before diving in really, I just wanted to start here by re-emphasizing again the strength in our 5G Core portfolio. The business momentum is really here. The standalone 5G Core market window is open. Customers now make long-term commitments in their choice of vendors here. We'll come back to our track record so far, but we are winning a lot of these deals. This is really a cornerstone in our journey here in digital services, 5G Core contracts and what we call attached sales around that, and hence the investment in R&D in this area. If we look at the chart here, starting on the left side and with our investments in R&D. Earlier in this year, and we have talked about this before, we decided to really prioritize long-term ambitions here rather than going for short-term results. We have increased R&D significantly when it comes to 5G Core and orchestration. It adds expenses in the P&L, of course, short-term, but builds value clearly for the mid and long term, very similar to the development we've seen in networks as well. We also continue to make R&D investments in automation, and this is really more to drive efficiency in our delivery of software and to become more efficient in our own R&D. Thirdly, we also invest going forward now for the future in service orchestration, and in evolving now the portfolio to enable our customers to serve not least their enterprise customers, including 5G network slicing and edge solutions. Looking at gross margin, here a couple of aspects. First, just to put in perspective, the packet Core area, including 5G Core that we talk so much about now, that represents about 20%-25% of the total revenue in digital services. The other 75% or 80% of revenue is delivered from the other areas, which all have a clear trajectory towards improved profitability. This is underpinned by the transformation that we are driving here toward more software-based content and more industrialized solutions. One area which I think is worth to call out here is the BSS. We're actually pleased to see that the BSS strategy that we revised in 2018 is delivering. It's been executed, and now the BSS area is delivering gross margins in line with the group average levels. Another aspect impacting gross margin also positively now is that we are managing all of these 45 critical contracts that we talked about and started to mention back in 2017. The gross margin improvements that I just mentioned and the things we do coming out of technology investment are then partially offset by the initial 5G Core deployment cost for new product introduction. That's why we see an improved gross margin up to 2022, but not yet enough. However, beyond 2022, we see then that we continue the transformation towards software-based solutions to customers. This is going to contribute to the improved gross margin that you can see here to the right on the slide. Software share will increase, and the recurring element of software will also grow in our digital services businesses. You can see here that is really the most significant contribution to our long-term profitability target. Finally, if we turn to net sales, the way the 5G Core contracts work is that we start to see revenue in the P&L when the networks go live. Then the revenue from those contracts grow then with added subscribers to those networks. This means that revenue from those will start now, start towards the end of the year, and then continue to grow over time. To continue then on the sales piece, of course, the mainland China reduction has cost us quite a bit of top line, and that's what you can see in the thin sales line leading up to 2022. Of course, our ambition here is to compensate that with market share gains in other markets, and this we already saw actually even in the third quarter that this is happening. Finally, when it comes to our ambitions then on CSP enterprise and service orchestration portfolios, we expect those to start to be visible in terms of revenue by 2023 and onwards. This is then as things like dedicated networks start to scale up. Edge, as I mentioned, and network slicing components are being commercialized. Next slides, and I will finish off with this, shows a bit about the momentum in deals won. So far, we have landed 45 standalone 5G Core contracts. You can see that on the left here. 15 of those are added since October last year, and eight of them are live and generating revenue. It's really based on our containerized cloud-native technology that we win these deals, and we anticipate that we will continue to lead the 5G Core market and add more customers to this list as well. As mentioned before, it's not only about 5G Core. To the right here, you see examples from the other parts of the portfolio in Digital Services. Starting with BSS, we have 70 new deals in 2021, all in line with the BSS strategy that we have put in place. Actually, our customers need to modernize their BSS to become more agile in the consumer business, but also to meet the enterprise customers' requirements. 5G Core, as said, drives attached sales as well. A good example of that is here what you see on OSS, where network orchestration is a good example. Last year we celebrated more than 100 customers here in our Ericsson Orchestrator. Since then we have added another 30 customers on top of that. Cloud communication. More than 160 customers have chosen our VoLTE solution for their voice offerings, of which about 20 new customers are new since last year. Then on cloud infrastructure, we have about 230 customers already and 29 new customers added so far in 2021. I hope that gave a little bit more meat on the bone on DGS, our digital services segment, and the road to profitability. Essentially, it's about investing in technology leadership, winning us market share, and improving the margins through a shift to higher software content. Thank you, and back to you, Börje. Thank you, Carl. Now I'd like to shift gear a bit and talk more about our overall strategy as well as what the opportunities we see that we can grow in enterprises. Starting here and really saying as a result of the focus strategy we launched in 2017, we have now delivered, in a way, a clearly improved performance, including cash flow performance. It's all based on a very strong commitment to R&D to be technology leaders. This has also established a strong platform to make strategic choices from going forward. The basis for our performance and the basis for us as a company is, of course, a competitive product portfolio. That today is built upon the leadership in RAN core as well as management and orchestration. We can deliver those at a very competitive cost. For us, continue to drive the performance in the core business is going to be critical, and it's actually the fundamental ingredients that allow us now to make strategic choices for the future. I think it's also fair to recognize, and you all do that the 5G deployment curve, even though it's been growing sharply now and growing great now, it will flatten out, or is at least likely to flatten out. You see that in the blue bars here, the darker blue bars on this chart. We see that happening in the years ahead. This is a pattern we've seen in other Gs before. I would also say that the previous generations of mobile technology really only addressed the consumer market. What is actually different with 5G is that it's also addressing enterprise needs. It was actually designed to fulfill enterprise needs. We believe that is going to drive traffic into the networks and actually provide a much longer investment cycle in the networks. It will also start to open up for new segments to be attacked with mobile communication. We believe that focusing on maximizing the value in our core mobile networks is the fundamental focus going forward. We also see that we can make a focused expansion into enterprises. This will open up higher growth markets as well as new value streams that we can realize here. What we see with the new future with 5G is that businesses are increasingly making choices where wireless can be a primary access technology. This is very different, and we believe this opens up new markets for us that could be worth up to SEK 25 billion by 2025. This is maybe more importantly, a market that is growing very fast already today, achieving growth rates well above 20% per year. It also offers good gross margin as well as operating margin opportunities for us. The last 18 months, we have seen the importance of mobile network to manage during the COVID situation, and mobile networks now play a key role in societies as well as allowing many people around the world to work remotely. There is no question that with 5G, we're lifting the performance to a completely new level, where we will have much higher bandwidth, lower latency, and much higher capacity. We think that also will offer new opportunities, basically to specify quality of service that in addition to consumer applications, will start to allow enterprises to take advantage of the wireless networks. We see that we're already being able to unlock value for enterprises with 5G, as we can adjust in a way the digital infrastructure based on the needs. Carl mentioned it already, we start to see network slicing, gaining momentum. We see orchestration and edge clouds, that is something we are developing together with leading partners in the whole ecosystem. We see that we are only at the beginning of that development and the opportunities are clearly ahead of us. We see that there is a long-term value for us that can be captured by being an enabler as well as orchestrator of that ecosystem that's going to come. What we also know is that from the 4G experience is that really the developers that develop applications on top of the networks, they're actually realizing value that's multiples of the investments that goes into the network itself. We believe with 5G, that will be even more the case. Let me give a couple of examples. One is, for example, on quality of service, where you can have network performance adjusted in real time. This basically enables us to differentiate the service to customers, recognizing each customer may have different quality needs or performance needs. Think, for example, telemedicine, or think, for example, a sensitive video conference where you need to adjust and rely on very high-quality performance or high-quality networks. I think this is an opportunity for sustainable growth for us, and I'm very excited about driving this strategy into the future. We, of course, are going to see that we are already today starting to offer dedicated enterprise offerings. We have our dedicated networks, we have mission-critical networks, IoT, but we also have, of course, network near solutions. Here, one that we're clearly investing in is Cradlepoint. It's a network need. Not only does it provide us with a market opportunity, it actually generates revenues also for the CSPs, because with every Cradlepoint installation, there is a network need as well. We see this to be a win-win together with our CSP customers. We're also very encouraged about the performance we see in those enterprise applications, where we can provide a very high growth. For example, we see Cradlepoint growing very rapidly, following well on our plans. Most importantly, we're also seeing the gross margin performance of that business to contribute to us as a company now. That shows that to succeed in the enterprise area, we know already that we need to, of course, build on what we have to develop them organically, but we also need to rely on inorganic opportunities. With the capital situation we have, we have the opportunity to make the acquisitions we need to strengthen our offering in enterprises. Now let's move on to the summary slide. I'm putting another, I would say, strong quarter to our track record. We continue to be well-positioned to take advantage of the market opportunities as 5G continues to be deployed globally. We continue to take proactive steps to manage the supply situation, but we, of course, had some impact this quarter, and we think it could pose a risk for the fourth quarter. The C-band rollout continues in North America, and that's a key opportunity for our customers and therefore also for us. Based on a very competitive 5G portfolio, we continue to see a path towards winning more 5G contracts as we move along, both in North America and in the world. When we look ahead, we do feel that we're in a good position where we can take the next step strategically. We're, of course, as an interim step, going to deliver on the 2022 targets as a group target, but we're also very committed to our long-term targets for the group. With that, I give the word back to Mr. Nyquist. Thank you, Mr. Ekholm, for that presentation, and thank you, Carl, for the presentation that was more of a strategic focus. With that, we still have 20 minutes and maybe a little bit more to answer your questions here. I would like to give the word to Mark. Can you hear me? Thank you. Just as a reminder to participants, if you do wish to ask a question, please dial zero one on your telephone keypads now. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Edward Snyder at Charter Equity Research. Please go ahead. Your line is open. Hello, Edward. Thank you very much. Good morning. How are you? Good. How are you? Good. Congratulations on the gross margin performance, which was very impressive. I believe that's the highest we've seen since we started covering Ericsson in 1999. That's a lot to recommend your turnaround strategy. I had a question on gross margin. As the mix of 5G deployment skews even further from China, especially towards North America, why shouldn't that put upward pressure on margins? Your 5G systems have a higher software content than past systems, your chip strategy has proven more successful than any of your competitors. I'm just curious about why coverage projects wouldn't run close to these levels, and then densification perhaps raise them further. I have a follow-up. Do you want to take it? Yeah. Thank you for your comments, by the way, on the gross margin. What we're seeing is the fruit of the whole strategy and the entire work we have put in actually since 2017, I would say. Investing in leading technology, that's gaining us market share, that's also now translating in an ever-improved gross margin. I think our job is to obviously continue on that path and continue to design cost out of our product. At the same time, make it more and more attractive for customers to win further share. I would only say thanks again, as Carl said, for your comment first. We have spent quite a big effort in actually, in a way, removing the exposure to business mix a bit. What you see early in the cycle is, of course, more hardware. We're quite comfortable about the future gross margin development, I would say. Yep. See that to be providing an attractive basis for our future performance, clearly. Great. You mentioned that the IPR annual run rate would be around $7 billion for existing contracts. Is it possible to get back to $10 billion without China, or should we expect this just to remain where it is until some other resolution occurs there? If we could, please remind us of the foreign exchange impact, or your exposure to the US dollar. If all else is held constant, what should we expect for, say, a 10% decline in the dollar? What would that do to revenue and cost? Thanks. If we start on the IPR, and then Carl comments on the sensitivity to currency. Let's not speculate about how future contracts are going to look like. We'll communicate once we know how they will be and when we have landed them. Clearly, we have a strong portfolio. We have a good IPR portfolio that allows us to negotiate with license partners, and hopefully, we can realize a good value going forward. That's at least our ambition. Let's not go into the details yet. Right. On FX, at least if we generalize a bit, our rule of thumb is that 10% change in the US dollar SEK rate translates into about 5% on top line and 1 percentage point on EBIT. This quarter, the impact was not that large from currency. Previous quarters, we have seen a quite more dramatic change, of course. Great. Thanks, Ed, for those questions. Thank you very much. We'll move to the next question, which is from Alexander Peterc at Societe Generale. Hi, Alex. Yes. Hi, good morning to all of you. Morning. I just have a question on the supply chain risks that you see. I'd just like to understand what kind of visibility you have for the supply chain. Do you have good visibility for the next, let's say, three months and so, you might have some impact, but nothing really major. Then if you could maybe be a bit more detailed on what you're missing exactly in terms of components, or is it logistics rather that is a problem? Does that also lead to any tangible increase in your input costs? If so, can that affect your gross margins or your pricing going forward? Thanks a lot. What we see during the end of the third quarter is actually it's individual components that's been missing. That has, in a way, driven up our WIP inventory, and resulted in some lost sales, basically. That's what happened. We think these are disturbances that could happen. I wouldn't exaggerate them because we have reasonably good visibility, and we have quite good management of the supply chain. These were late in the quarters decommits that resulted in this disturbance. I wouldn't exaggerate the risk going forward, but it poses some threat, put it that way. It's very hard to tell you exactly how Q4 is going to look now, but we feel quite comfortable about our supply situation going into the quarter. If you look at logistics cost, et cetera, of course, you have some upward pressure there. We also think those are manageable as we see today. We're actually benefiting a bit from our supply chain, which we have created with some flexibility, with some new facilities around the world to reduce our exposure a bit to logistics costs. Of course, we need to always be vigilant at how we manage our cost structure and manage our deliveries to customers. So far that has had some, but very limited impact on our margins, and we kind of absorbed that in the margins, actually. You see they are developing quite well anyway. Thanks, Alex. That's great. Thanks a lot. Thank you. We'll move to François Bouvignies from UBS. Hello, Francois. Hello. Thank you very much. My first question is on the global RAN market that you expect, or maybe Dell'Oro expect to grow 2% in 2022 and 3% excluding China. What I wanted to ask you is how you feel Ericsson can be versus this target today, and we saw a stronger market in the U.S., obviously, in the last six months, with twice you upgraded your numbers for 2021. How much do you think is a pull-in, or is it something that also the strong market that you see toward the end of the year is also going to translate into 2022? Just try to clarify a bit on the 2022 outlook and how Ericsson is comparing to. My quick follow-up is on the IPR, just a clarification. You have SEK 2.6 billion this quarter, how should we think about Q4? Because I don't understand how much is a one-off or catch-up amount, if you just clarify. I'm sorry if I missed it. How much we should think about Q4, please? Thank you. You take? Yeah. Okay. On the RAN market, I think, obviously Dell'Oro expects now, as you said, 2% growth in 2022, 3% excluding China. Our ambition remains to grow faster than the market, and I think we have proven that in the past that we are gaining share. Of course, some of the deals that we have won, contracts that we have landed, are not yet visible in the sales numbers either. That remains to be seen. U.S., of course, being a very big component here, there we have very good momentum. As Börje mentioned before, now with the C-band build-outs, we are seeing good CapEx levels from our customers, and we expect that to continue as well. We have decided to look at the Dell'Oro and talk about the Dell'Oro forecast for the future market development. We'll stick to that and then try to grow faster than that number. IPR. On the IPR. Yeah. We haven't disclosed exactly the retroactive element there. As you know, it's SEK 7 billion on an annualized basis. There is a certain retroactive element here in Q3, but I think that's as far as we can go. The IPR revenue should come down a little bit from the Q3 numbers because of the retroactive element included in Q3 numbers. I know you- Do you want me? I just want to comment on, because I know everybody wants to know a lot more about the details on IPR. There is a commercial element here that we also need to make sure that we maximize the value of the, call it, of our patent portfolio. Disclosing too many of the terms in individual contracts just simply gets too sensitive, and may actually hurt our ability for the future. That's why we're a bit restrictive here, but trying to provide the guidance that at least can make you form some sort of opinion about each quarter. I know it might be a bit unsatisfactory, but it's not for lack of willing, it's actually to try to run a better business. Yeah. Makes sense. Thank you. Thanks, François. We'll move to Morgan Stanley and Dominik Olszewski. Hi, Dom. Hi, Peter. Hi, everyone. Hi. Hi. Two questions. Firstly, on digital services, could you just talk about what drove better EBIT performance in Q3 specifically? Obviously, it did better than the comparable performance that you talked about when you were talking about Q2 and Q2 into Q3 being the rough same level of profitability. What was the difference there? Anything in the customer portfolio or product side? Second question is on Cradlepoint. Can you talk about the success so far you've had in basically immediately adding value to that acquisition? One of the elements I remember was going international, you acquired the company, I think 90% of revenues was in North America. How much success have you had in actually growing that into the rest of the world? Are you still expecting the 25%-30% top-line growth in that business and over 60% gross margins that you talked about before? Should I tackle the Cradlepoint first? Yes. Give you the digital services? Yeah. If we look at Cradlepoint, we have started now to gain success in the international markets. It's still early in the days, but we're starting to see that to pan out, and the investments we've made in SG&A have actually started to contribute today. The gross margin is actually better than what we predicted when we made the acquisition. We are thereby feeling that we are delivering even a little bit better than we had in our own plans a year ago when we made the acquisition. We have not disclosed all details here. As we build out the enterprise, we will of course see how we're going to disclose more and more of the activities we do in there. Bear with us a bit there. At least we can see that we're going in the right direction, both on top line as well as the bottom line. Growth rates going forward should be, at least in what we think the market is. If the market is 2025, we believe we should be able to grow a bit faster than that, because we can add the value of international exposure as well. Good. Dom, on digital services, why did it turn out better? It's a combination, actually, of higher sales volumes than expected. As you saw, even after the decline in China, we actually grew in that segment with 1%, so that exceeded our expectation. Secondly, gross margin was stronger, and that has to do with the software share of sales, which again is exactly in line with our strategy to drive up software. It came out stronger in this quarter, so therefore, we beat the expectations then. It's very encouraging, by the way. Thanks, Carl. Great. You're happy with that, Dom? Yes. Perfect. Thank you. We'll move to Daniel Djurberg at Handelsbanken. Good morning, Daniel. Good morning. Thank you for taking my question. Also congratulations on a solid gross margin and cash flow. Truly impressive. I would like to start again on the supply chain constraints that could pose a risk that you mentioned. My question is really if you expect the impact to be lost revenues or more of deferred revenues into future development or deployment, I should say. That is the first question. Then if I may, on the digital services, you comment that 75% roughly lies outside Packet Core, and also that it took a good momentum here with 30+ deals on BSS and some 30+ on OSS so far. Can you comment a little bit on the revenue model for those? Because I at least can't see the full impact from those quite high numbers, to me at least. If you could comment more on what we should expect, given the 75% sales being outside of Packet Core, and possibly also a comment on the percentage of OPEX being tilted to those 75% of sales would be great. That is my questions. Thank you very much. I'll take the supply chain. Maybe you take the DGS question, Carl. I'll have that. Yep. On supply chain, yes, we have seen some disturbances. Our ambition is to work with the customer, of course, to make sure that we fulfill their needs. That's ultimately the only way for us to be successful. If we can do that, it really will end up being delayed sales, and we can realize it later on. That's what we're trying to work towards. It's always a risk when you have a supply disturbance that you can't satisfy the customer. We're going to do what we can, and so far we have not seen that we have lost sales. Our ambition is to keep it that way. Okay. Daniel, on the DGS, Digital Services. I would say when it comes to the revenue models and so on, it's really similar to the rest. Of course, it's a change versus what we had years ago, where we went in, for example, in the BSS area with a services-led scope, sometimes a little bit undefined. As you know, we had more than 40 contracts of that nature that we have now worked hard to get back to a decent profitability level. Now instead, of course, we lead instead with software, with the product. That goes for all of these categories. There is a certain element of system integration, of course, in there as well, and we charge as we go. Mainly it's a software business now, and this is also what we're driving for in all of these areas, and that's also, as you saw on the graph before, what is going to improve our overall profitability the most. OpEx percentage, I don't have on top of my mind, actually. I think we can leave that for now and maybe come back to it. Sorry. Yeah. May I give a short follow-up on the same topic, just on your assumption? Thank you for giving this color. Can you comment on your run rate IPR assumption for Digital Services in 2022? Is it SEK 7 billion that you talked about, or is it something else because of the litigation ongoing? On IPR, what we have said earlier actually is that we assume IPR to stay flat in our business planning activities. Okay. Yeah. Great. Thank you. Thanks, Daniel. We'll move to the next question. I know we're running over the hour, but I will take two more questions because we had a little bit of a longer presentation. Next one is from Peter Kurt Nielsen at ABG. Hello, Peter. Thank you very much. Hello, thank you for taking my question. Can I just turn towards the sales side, the top-line side, please? If we look at networks, even adjusted for the lower sales in China, the organic growth in networks appears to be a bit below the market growth forecasted for the RAN market, sort of overall and even for the regions Europe and North America. You are talking about gaining markets here. Could you elaborate a bit on why we're not seeing better sales momentum given the strong overall momentum in the market? Then just referring to your comments about the three large contracts in North America. Should we expect to see a step up here from next quarter and next year onwards, please? If I may add a follow-up on digital services, as was highlighted in the previous question. Q3 EBIT is significantly lower than you expected three months ago. You're still anticipating a break even in Q4. Why is that, given the positive trends? Thank you very much. Should I start with the second one, Börje? Yeah, you can do that. Okay. I'll take the third one also. Okay. I can take that. Yeah, on digital services. Yes, we maintain the guidance there, or the anticipation on break even in the fourth quarter. The way to look at it, I think, is to look at the second half then. That will perform significantly better, thanks to the improvement now that we saw in Q3. We still maintain the break even ambition and guidance for Q4. Look at the full six months, and it's then substantially improved. If you take the top line, I think it's a couple of different factors to keep in mind here. One is, of course, the supply chain disturbances we had that have had an impact on network sales in the third quarter. We should also remember that what we have tried to do is to well, some part of the gain in footprint have very limited attached services. As we see going forward is that we will have a little bit less of attached services, and thereby you're going to see sales maybe not developing as fast as necessary, the growth in the underlying market. At the same time, we do believe our product sales is longer term, a much more attractive business than selling the services. When you look at the growth rate, you need to adjust for that as well. Great, Peter. Good. Okay. Thank you for that. We will actually now move to the last question of this session, and that's Sébastien Sztabowicz from Kepler Cheuvreux. Hello, Sébastien. Yeah. Hello, everyone, and thanks for taking the question. One regarding China, because your top line is dropping fast and you now plan to attack a little bit the cost base there to protect your margins. Do you see any opportunity to come back in the country at some point with some additional contracts? That would be the first question. Second one, regarding the rise of input cost everywhere in the market, chips, logistics, and so on. Do you see any room to increase the price of your base station in some specific contract in order to protect somewhat the margins? Thanks. I like to think when you lose a contract, the day after, you start to fight to win it back. The same is the thing with China. I do believe we have a chance to win back the trust to deliver products in the future. We're focused on regaining that. Of course, short term, we just simply need to adjust the cost structure to right size that as much as we possibly can. We're going to try to be there. I think it's important to remember, yes, we see cost pressure upwards as you indicate. What we are also seeing as we counterbalance that is actually that this is an industry where it moves very fast on generations as well. We're actually introducing new products at a higher pace than we have ever done. That's also a way to combat, call it input price increases. We feel quite comfortable about our gross margin profile and the way we run the business right now. Great, Sébastien. Thank you. With that, actually, that was the last question. I see I have more questions on the list here. Please contact the IR team, and we will set up meetings, and we can discuss those. Before closing, Börje, maybe a remark from your side. I just want to say that we continue to execute on our strategy. It is built upon winning in the core mobile network business, and here we continue to have a very high intensity on our R&D. That helps us to do two things. One is to offer competitive solutions to our customers, but equally important, it also addresses the cost structure, and we can actually continuously become more efficient by investing in R&D. We feel that with the targets we have committed to for 2022, as well as the long-term targets, we're very comfortable about our ability to deliver on those. Thank you, Börje, and have a great day. Thank you all. Thank you.