Welcome to the Ericsson’s conference call for the third quarter report. To view visual aids for this call, please log on to www.ericsson.com/press or www.ericsson.com/investors. [Operator Instructions] As a reminder, replay will be available 1 hour after today’s conference. Peter Nyquist, you may now open the call.

Thank you, operator and hello everyone and welcome to the call today. With me here today, I have our CEO, Hans Vestberg, and our CFO, Jan Frykhammar. So during the call today, 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 to you, Hans, please.

Thank you, Peter. So, let me go through a little bit the key developments in the market, what we have been discussing with our customers. And then we briefly mentioned in the second quarter that 5G is taking off and start to be discussed and we see implementation of testbeds very much focused on Korea in the second quarter now with also the U.S. We have China in the discussion, Brazil, many markets that we now are implementing testbeds, with us starting to look how far it will impact and it’s of course very different design on 5G than 4G, 3G and 2G. It’s much more than an industrial Internet. Would be some type of solutions that can be applied for different industries rather than only having a consumer view on their mobile technology and that goes very much hand with the Internet of Things discussion that is going all over as well at the same time. Another thing that is common theme by all operators of course the increasing radio traffic in the networks, how to handle it in the best way, how to deliver it in the best way, comes very well in hand with our investment in TV and media that we have done everything from conversion to caching to the right management all of that depending for the prime and content or not. This is both the mobile network and IPTV networks, I would say. We see and this is on news, but of course that some of the markets were there have been so-called the devaluation on the currency or weakening on the currency. They get a little bit harder to spend the CapEx in dollar and that is – and we want to be clear, it’s very important. We don’t want to put the…

Okay, thank you, Hans. Let me then start to talk a little bit about the gross margin, close to 34% in the quarter, about 35% a year ago. The main reason for this drop compared to a year ago is higher share of services, it’s approximately 3 percentage points high share of services in the quarter. The rule of thumb that we have talked about for sometime now approximately is still valid, approximately every percentage points increased in services share has approximately a 0.3 percentage points impact on gross margin. I think that holds up also this quarter. Also higher restructuring charges, is one explanation. Similar explanations when it comes to the increase in gross margin compared to the second quarter. If we look at the operating income, then Hans has mentioned a lot of this already. I think underlying of course this year is the year where we have a positive impact, net FX positive impact on operating income, that’s there. Of course, this revaluation of the hedge contract talk, I mean that goes up and down every quarter and that has to do with the future and obviously the exchange rates that we closed the books with. Lower cost is the fact. Breakeven in Network Rollout is good. Its one quarter we would like to make this a trend of course. But I think if you look at the improvements over the course of many quarters, we have seen an improvement quarter-over-quarter over a couple of quarters now. We now want to make sure that we create a sustainable breakeven situation in Network Rollout. Then if you – if we then talk about operating expense, SEK14.9 billion in the quarter, if we then exclude the restructuring charges, it’s SEK14.3 billion compared to SEK15.2 billion a year ago. And…

Thank you, Jan. Let me then go into the different segments, starting with Networks. So we have spoken quite a lot about the things that are happening in Networks and up 4% in reporting currency and then down 15% in constant currency. That’s a little bit more than we had in previous quarter, mainly again in China. So, it’s nothing new, it’s more somewhat slowdown we have seen from a high level in China. There are also regions growing well here. And then sequentially down 6%, basically nothing extraordinary neither. And here of course is China an important piece of it. Operating margin 12%, excluding restructuring, we now had double-digit margin in Networks, eight of the nine latest quarters. Q1 we all remember, we were not there and we said it’s not the trend and it was on the trend now. We have hopefully proven that we have a very ambitious plan to stay below 10%. We will understand that we cannot sort of have it always clear, but we definitely work with them. Eight out of nine is proving that we have a good track record there. And of course expenses as Jan has talked about important. Two important things that its radio system is starting to be shipped in this quarter and that we launched in Barcelona. We will also get our first contract on the HDS 8000, which is a hyper scale cloud server that we are building and that’s also very encouraging. We launched also in Barcelona and resides in our business unit cloud and IP. Now, you can see there that on the operating income margin, we have gradually improved from the beginning of the year to a 10 and that of course also includes restructuring charges. So, it’s excluded. This would be more even…

Thank you, Hans. And now, operator, we are open for questions from the audience. So, please?

Thank you. [Operator Instructions] Our first question comes from Alexander Duval from Goldman Sachs. Please go ahead.

Yes, good afternoon. Alex Duval from Goldman Sachs. A couple of quick questions. Firstly, on the U.S. networks in particular, it looks like those were double-digits down organically given the FX benefit you get. But when I look at Verizon’s wireless CapEx that was actually up and AT&T was roughly stable. Obviously, the correlation is never perfect between the two, but I wondered if you could give a bit of update on that? Second of all, on the China slowdown in the third quarter, obviously, activity levels have been high for a while. But you have expressed some confidence in longer term 4G demand. So, I wondered if you could update on what underpins that view? And thirdly, on gross margin, it looks like that number was somewhat light versus where consensus was modeling. That significant degree seems to have been caused by higher mix of services, but could you give a bit of an update on pricing in the market and competitive intensity as well? Many thanks.

Great. I was trying to capture all your questions here. Talking with the North American markets and the CapEx, I mean, you are right, I mean it’s hard to draw a correlation within the CapEx of the U.S. carriers and – first of all, it’s a lag between when they are spending and we have our revenues. And then second is of course the nature of what is inside the CapEx, because it could be areas that we are not into or it could be areas that they can even decline CapEx and we are getting more business. So, that’s very important. But also if you look at some of the carriers in the U.S., they are using CapEx not only for the U.S. anymore. They are sort of moving CapEx into Latin America, for example. And of course, we can benefit from that in Latin America, so that will be reported somewhere else even though you see that they are stable on CapEx and/or they can deploy it to TV and media, for example. So, we are working with it very closely to see how our customers are developing there and how they are spending the CapEx, but your sort of insight there about the levels, those are correct, but it’s not correlated 100% though how it’s interpreted in the business for us. When it comes to China, yes, I said, I have just very recently been in China myself with some of my executive team members, met the customers to talk to them see what’s happening. I can at least at this moment not say that we don’t see an underlying demand growth in subscriber, 4G subscribers is unparallel in this market as well as we see – as any other market in the world, we see that…

No, I don’t want to add anything. I think the gross margin bridge there, Alex it has to do with services. You shouldn’t read anything else into mix than that.

Many thanks indeed.

Okay, are you happy with that?

Thanks.

Next question please.

Thank you. Our next question comes from the line of Pierre Ferragu from Bernstein. Please go ahead.

Hi Pierre.

Hi, good morning, how are you? So a quick question actually on your cost reduction programs. You have made significant progress in reducing your OpEx this quarter. And I had two questions. The first one is could you give us a sense of what’s behind you and what stands still in front of you in the next 6 months to 12 months in terms of cost reduction. And so we have your target of SEK9 billion for the full year of 2017. If you could just recap what are the drivers that you have improved yet and that will be on your to do list in coming months. And if so if you can give us a quick reminder of how much of that cost cutting is going to affect your OpEx and how much more is coming into ship [ph] after on your gross margin. And of course on the gross margin side, it’s difficult for us to read what you have achieved so far. So if you could tell us what you achieved so far there, that would be great. And then my second question is about your recession development costs. So the amount of costs you are capitalizing has increased over the last three quarters – two or three quarters by SEK600 million, SEK700 million, so it’s a highly significant number. And I was wondering if you could give us some visibility on what’s happening in your R&D, why is this number increasing and how we should think about it as a run rate number going forward as we track your progress on cost cutting, it’s important for us to make a very clear difference between expenses that are getting capitalized and expenses that are actually taken out of your cash expense every quarter? Thanks a lot.

Okay. Pierre, it’s Jan here. So let’s start with the overall cost reduction program then. And the ambition is to improve the cost base by SEK9 billion in 2017 and the baseline is 2014. It’s – in terms of the activities and so forth, it’s still very relevant to model with half-half between cost of sales and the operating expense, that’s still very relevant. Also remember that we started 2015 on an upward growing trend here in terms of R&D expenses in particular, but when we measure this we baseline from the operating expense and fixed cost of sales levels as they look in 2014. So – and in terms of the things we are doing, obviously we will continue to execute activities. You see that if you look at the headcount numbers, the gross number is down 5,000 people in the quarter. Not all of that is related to the cost reduction programs, some of it is also normal rightsizing that you have to do and the normal efficiencies every year. I think in terms of what you will see happening here in 2016 first half and so forth is of course that we will start to see a more material impact from the program that was announced in Sweden. We are continuing then with things that is addressed – that is addressing the service delivery, that continues as a continue to do list for next year. We will also continue to work with the IT infrastructure and IT related costs and so forth. So there is a to do list, I agree. But when it comes to people, you also know Pierre that we prefer to communicate all of these things to the relevant organizations first. But I think we have got start – we have gotten –…

Thank you.

Thank you, Pierre. We will go to next question.

Thank you. Our next question comes from Tim Long from BMO. Please go ahead.

Hello Tim.

Hi, thank you. Just back to the services business, thinking about the gross margins here longer-term, so it’s been overall Op margins have been pretty consistent for managed and Professional Services. So is there – are we kind of really no chance to improve gross margins that would only be pricing, is there anything that could be done to help improve the gross margins and maybe mitigate the mix shift that we see. And secondly, on the Network Rollout side good performance in the quarter, how was that – a little bit more detail on how that was done, is this just being a little bit more strict on pricing or was there good cost outs to help us get an idea of how sustainable that might be to have that run at breakeven? Thank you.

Thank you. Good questions, I mean when we talk about the gross margin, that’s as you said it will be a combination of hardware, software and services which all of them have different type of nature. But given the push we have for software, of course there is also a chance that the gross margin can go up. I mean we are in the pricing transformation right now with our customers a 3-year – over 3-year term in order to actually price our products more like a software. And the reason is very simple, we have so little hardware, and it is going down dramatically. We launched that one year ago, our software model that we did publicly as well so everybody knows. But we cannot do it immediately. It comes up new tenders or new renovation of contracts and we are negotiating each one of them and the area which is further to have their support solution that has done that for a while. Tougher has been in Networks because you also need to move and change the technology in order to be able to charge like a software. You need LTE locks and keys and optionality, packages, etcetera. And that’s it guides us on tremendously over the last 3 years to put together and now we can do it, so that will of course increase software over time. And we have an ambition to increase our software and services in totality. So that’s all we structure doing in order to get there. Then the mix will always be there, services intrinsically have a lower gross margin, but they can definitely still get out bottom line that is very competitive.

Okay. Let me add a few things. So on the Professional Services margin, how do you get more leverage, I mean the work that the team does is of course to work diligently with tools, methods and automation. And we invest significant amounts on tool development for services each and every year. So we will continue to do that in order to create both automation and one-to-many delivery models. That’s one important leverage. On the Network Rollout piece, that’s more of a business that has higher element of variable or consultants or subcontractors in delivery. But still, there is a lot of tools development to reuse solutions and so forth. This particular case has been very much focused on knowledge sharing tools and also much closer work between the radio product areas together with services around the ease of installability and so forth. We need to do those kind of things because we know that we can’t go and ask for price increases to customers. We need to care take care of the projects that we have taken on in a good way. So those are the things we can work with it.

And then on Network Rollout, it’s not pricing. I think the guys has worked a lot with the projects in Network Rollout, the ways of work in the tools methods and processes. So, I think that is a very tedious and good work that has been done across the globe. Just imagine how many Network Rollout projects we have in 180 countries. It’s enormous lot of work and it has taken some time. And we saw one quarter right now. Jan has said it several times. We are now looking for sustainable, because we think that this will not be a high margin business, but it should not be a drain to the bottom line, but we will also have quarters where we have certain projects coming in and out. But to be clear, this is hard work with our cost base and the ways of working. And Jan mentioned tools, method, processes, consistent work across the globe. We have global teams that are working with all our local organizations. So, I think growth [indiscernible] and they have been able to turn this around.

Okay, thank you.

Thank you, Tim. Next question please.

Thank you. Our next question comes from the line of Edward Snyder from Charter Equity. Please go ahead.

Thank you very much. Hi, Hans, you have talked about again on 5G rollouts starting in China specifically more of an industrial event like IoT. I was just wondering is the profile of this upgrade going to be quite a bit different than we have seen from say 2G to 3G and 3G to 4G? In those, we saw a big change in the backbone of the infrastructure, the modulation scheme etcetera. A 5G is going to be LTE like 4G was? Does this change not just the ASPs, but the margin profile of what you are looking at or even the timeframe that it takes to roll this out given that probably going to be dealing with the LTE for quite sometime now given the radio capacity issues? And then Hans also if you are looking at the profile of demand in 4G now in China starting to slowdown, I know it has something to do with the economy, but if you compare that to what happened in North America, we had several years of very strong build-out and the next followed by kind of a lower level and stability. It looks like maybe China is following the same path. Is this the template we can expect you think for most 4G rollouts as they get into India several years of growth and then a big drop-off and then more of a stable? Just trying to get an idea of what you think the profile will be once we see maturation of 4G in some of the emerging markets? Thanks.

Yes. Starting with the China comment together in 5G, so when I talked about the utilization in China, it’s based on 4G, so we are clear on that. So that was related to 4G and IoT. Still I said in the beginning that many markets are now looking into 5G and China would be one of them. But when I talk about that the 21st century’s infrastructure would be mobility broadband and cloud. That is 4G-based in China, but 5G will come later on, so just to clarify that. If we then talk about the pattern and profile we could see, yes, I think Jan has talked about that several times that we have a pattern on coverage first and then depending a little bit how much capacity was in that coverage, you get to phase a little bit slower and then you cancel capacity. That’s how we work in all technologies. However, we don’t say that this is the case in China right now. We say it’s one quarter of a slowdown and it might not be – the underlying and the coverage is still there. So, I would say, you need more coverage in China. So, the coverage phase is not over in China, that’s what I am saying. But the pattern, as you described, that’s how it work between technologies. Then your next question is how will – how do you correlate the 2G, 3G and 4G? It’s a little bit early to say. We have standardization both this working on standardizing 5G to as much extent we would like of course, we would like to see that we can reuse as much as possible of the installed base when it comes to basebands, etcetera, when you move to 5G. However, the radio units have to be changed, because it’s going to be different frequencies. But we will only know that when we have decided what frequency is going to be and how it will define, but of course, one way to see it is that this could be upgradable from where we are, but it’s too early to say. We are now discreetly running 5G tests where you can – we can show 5 gigabits per second right now in our 5G test plants here in Kista, which enormous, but it can also give a latency it is 10 to 20 times lower than 4G. So, there is many new carrier guys on the network. And that’s why I am talking about many industries will be very interested, but we – we are trying to see that this is going to be as much reuse of the previous infrastructure, because that’s important of our customers and they don’t need to reinstall or reinvest again, but it depends a little bit how the standardization is going to be done. We will push for that.

Yes, I guess a follow-up then. If that turns out to be the case, would you reuse? And that seems to be the scenario that’s playing out given you are not going to see big change in modulation. Does that radically change the ASP revenue versus margin profile of wider deployment of 5G? So, if you go to IoT in the U.S. and eventually in China whenever it shows up and you are looking at industrial applications, would you expect your financial statements would show a significant change at least in networks as this started to penetrate some of the more advanced markets?

We are very early out now speculating on the margin profile. Remember, commercially, volumes is 20:20, but of course, if it goes that way, it will be more software centric sort of next generation mobile networks rather than hardware as it will be probably. Still you are going to need more sites, because you need to densify again a lot in order. And so – and you will also have much more of sort of orchestration layer over this, because now you cannot have discrete product in the network. They need to hang together if you are going to enable this, because it’s not enough that Radio Access is 5G. You need also the radio and maybe the transmission on IP radio and something to control that. So, there is going to be more and broader definition on 5G than we have seen on Radio Access.

Great. And then finally if I could, C-RAN are you seeing – I know there are some test deployments now, too, is that something that we can expect the next year or so or was that further out like 5G?

I think that C-RAN is such a wide sort of the question. I mean, there are different ways of doing C-RAN. I mean, you can do based on halters as I call them, you can virtualize parts of it. Parts of it we are already doing today. Other things we are looking if there can be more efficiency for our customers and if the used cases are there. So, you can say yes, we are doing C-RAN today, because we can actually pull together the baselines in one place, but then it depends on how much IP you have in between the radios and the basebands. So, you can do a lot of what C-RAN. So, it’s a more definition of what is C-RAN. We will – as a world leader in mobile technology, we will be exploring all new ways of actually delivering radio waves in a more efficient way. If that is part of doing different things, we will do it. We are very early on in the research on this area and some things we can already do.

Thank you very much.

Let’s go to the next question please.

Thank you. Our next question comes from the line of Achal Sultania from Credit Suisse. Please go ahead.

Hello, Achal.

Hi, thanks for taking my question. Just a couple. I think first on the Western European market, actually we have seen some moderate growth in the last few quarters and now this is the first quarter of year-on-year decline. And I think you mentioned a couple of projects getting completed, like a few projects getting completed in the region. Like can you give some more color around it like is it just one customer, is it more than one customer, and where we are in terms of project completion and how should we think about 2016 in Europe?

I think that the way why we write that in the report is obviously that one of the important projects that we have been carrying out for one very important customer is gradually coming to an end that is peaking, that’s why the comment is there and then I think we don’t talk more about it, I think you know what it is. I think in the terms of growth story for Europe in general, I think that – I think the – on the overall level it’s a lot of work still to be done in Europe in terms of 4G both coverage and capacity. So, that’s an opportunity to grow obviously. We have had in some markets lower investment levels for sometime driven by a lot of the consolidation discussions that is ongoing, but also driven partly by slowness from a macro point of view in some countries and so forth. So, I mean, I think trading points for growth is going to be around 4G and continued 4G deployments as well as perhaps hopefully some resolutions on some of the consolidation opportunities and so forth. So, that’s really what I see. I brought it there, because I think it’s important for you to understand that in the case of Western and Central Europe, you have that aspect of those projects with one particular customer.

That’s clear, Jan. And then maybe one follow-up on China, like if we try to understand clearly, I think you have seen a big rollout 4G in the last three, four quarters. Can you talk about where we are in terms of mix because my understanding was that the mix in China should improve as we get more and more 4G subscriber uptake on these networks, so can you talk about like where we are in that process, are we like just starting to see that or are we still like some just some – a few quarters away from that?

I think from my point of view and I will let Hans talk about his view on 4G in more mid to long-term in mainland China. I think for us, it’s – we are still predominantly, it is coverage, so capacity which we all would like to see has still not materialized and become relevant part of the business mix. So it’s mainly coverage still. Hans, do you want to talk about 2016, ‘17?

No. I think that we still have a coverage going out. The last time China reported 4G subscriptions, it was 200 million. That was in mid-year. I am pretty certain that they have many more right now. But it’s still a long way until they have full coverage and the subscribers on 4G. So that’s why I am saying we still have a coverage phase to go. And then of course that will go to the normal profile. When that is – it’s not now for sure. It will take some more rollouts before we will get there. And then of course, if you then start to get into industrial Internet of 4G, then you need to densify and a lot of other things as well. So we are going to see. Then we have the shift of the leadership of the three Chinese operators at the same time in this quarter as well, China Unicom, China Mobile, China Telecom has all changed Chairman. So that’s also something need to be taken into consideration here.

Thanks a lot guys. Thanks.

Thanks Achal. We will go to the next question operator.

Thank you. Our next question comes from the line from Francois Meunier from Morgan Stanley. Please go ahead.

Hello Francois.

Yes. Thanks for taking my question. You are talking a lot about TV broadcasting and you seem pretty excited about your contract with AT&T and DirecTV. The first question is could this big R&D investment you are putting into the cash flow something which could be reused for Netflix type clients, that’s the first question. And the second question is also about your new areas of growth, IP routing and you have not made a comment yet on IP routing and I was wondering if you could give us an update on how it’s going, especially with the new system you introduced this year? Thank you.

Yes. On the first question, it’s pretty simple, it’s yes. We had already worked with over the top providers like CMOR [ph] and HBOs, etcetera that were delivering these type of services for us. So yes, we could work with that. We have different type of TV platforms. We have one broad TV platform that can actually handling, which is MediaFirst, which can basically handle all types of accesses everything from IPTV to over-the-top linear TV to satellite TV at the same time. Then very much smaller sort of over the top service for TV that we acquired from Azuki that we can deliver to sort of standalone, over the top solutions only. So yes, we are addressing both those markets at the same time. Then was the second question about, I forgot. So as I reported a little bit briefly then and I understand your question, we say that we have good growth in all target areas. IP is in the target area when it comes to the areas that we have then put focus on when it comes to our IP portfolio. We have good growth there as well. We will be a little bit more detail how it looks like when we meet in the Capital Markets Day. As for all of the different area, but we see a continued good focus. As I said also the HDS 8000, we have our first customers on that and that we will of course start deploying in the beginning of next year. So yes, it is going according to our plan that we will take out with ambition to be in certain areas of the IP routing and that is moving along. But we will be giving you more updates when we meet at the Capital Markets Day as well as on OSS/BSS, TV & Media, the industry verticals and the cloud initiatives that we have as well.

Thank you, Hans.

Thank you.

Thank you, Francois. Next question?

Thank you. Our next question comes from the line from Gareth Jenkins from UBS. Please go ahead.

Hello Gareth.

Yes. Hi guys. A couple if I could. Firstly, I just wondered whether you have seen any change in market behavior following the announcement of consolidation earlier this year whether more aggressive pricing behavior or less aggressive pricing behavior or just no real change. And then secondly is a follow-up on China, just the working capital movement again seems quite heavy through the first nine months of this year and I wondered whether you feel that will unwind next year, whether the payment terms of those may be extended in China or in particular and that you will make good on some of those investments that you have to make upfront? Thank you.

Market behavior.

Okay, looking at Jan for answering the second question, okay. The first question, yes market behavior, I assume you talk about mobile infrastructure because we always end up talking about Networks when it comes to market behavior. Then you need to remember, 4% to 6% of our turnover is in pure services, OSS/BSS, TV and media with very different competitors as well with other behaviors. But I used to assume that you are talking about the consolidated market there. Now nothing new has happened. I mean, it is competitive when we all have new sort of infrastructure deals where you are building a new footprint or that you can have for 10 years if you perform well or maybe 5 years at least. So of course we see the same pattern there. But it’s nothing incremental or any major changes. Then you always – as I always say you always remember the last couple of deals that you have done and those can impact on your view what’s happening. But we would try to take it over longer period and see how the price and the market is developing, but nothing significantly changing in the market so far.

On working capital then, Gareth, this is – we are in project terms, right, which means that you obviously I mean typically you get you reach the billing milestone before that. It’s obviously in inventory, working capital inventory and then you reach the billing milestone. And that you reach based on preliminary or final acceptance. And that’s really what is creating the challenge when you are into project terms versus bid contracts. So it’s nothing else than that. We will do our utmost to make sure that we obviously reach the billing milestones, build the revenue here. And we have said that we think that there will be some project completions in Network Rollout and so forth in Q4, right. And that’s obviously linked to the fact that you reach the billing milestones and then you can collect. So I think that’s what we are doing. So it’s nothing else than the mix of mainland China, but also some other emerging markets, obviously. So that’s – we will work hard to make sure we improve, I promise you.

Okay. Thanks guys.

We are now open for the last question of this conference call, so please.

Thank you. Our final question comes from the line of Simon Leopold from Raymond James. Please go ahead.

Hello Simon.

I wanted to see if we could drill down a little bit on North America since so that’s your largest region. And I wanted to look at it from both a shorter term and longer term. From a shorter term perspective AT&T CapEx, it looks like it’s going to be very backend loaded to the fourth quarter. And I did hear your earlier comments about the challenge of aligning specific quarters, but just want to see what you are thinking in terms of that shorter term trend. And of more significance, when we look at this year and we think about 2016, I am wondering about the relatively easy comparison given weakness in North America yet, I think the prospect of improvement in 2016 and I am thinking about drivers such as the AWS-3 auction that was held earlier this year when the carriers need to spend to utilize that spectrum. So shorter term and longer term North America comments please?

I think I have said this many times that wireless CapEx is a lagging indicator to then the revenue just to be clear on that, because they obviously, once we have invoiced and build and so forth the operators do the actual capitalization. So it’s not a leading indicator to then the revenue, it’s a lagging indicator to then revenue. Hans?

Ramped in my comment, but thank you very much, Jan it was an important comment. I mean, for us you have to understand how we work. I personally are in contact with the Chairman and the CEOs of the operators, our key account manager as well to understand sort of the structure of the CapEx. I mean that’s what we need to understand. As Jan said, it’s a lagging indicator is what we are going to say and what they are going to spend and what they are going to spend and it’s not really hanging together with our revenue stream. We need to know what’s inside there things that’s important. And yes, there is a lot of new spectrum auctions coming up in the U.S. next year. I used to say if somebody buys spectrum, they want to build on it. So, it depends on when it’s going to be auctioned and when it’s going to be available. We know that those are coming out in the first half of next year, then of course, we are going to see who is going to acquire and when it’s going to be cleaned up, but clearly, new spectrum creates more need for deployment. However, many of the customers right now worldwide have multi-standard radio. So, then it comes down to carrier aggregation, using our baseband, adding new radio features in the towers, but using them carrier aggregation in order to have the best possible performance of the network, combining them the 600 and 700 or the 1800, 1900 in order to have it. That’s from a technology point of view and network point of view, I wouldn’t say its simple, but it’s fairly easy to do. It will take some time and it’s very – but what is really important is of course that the handsets can handle the same carrier aggregation in order to get the full throughput and their uses of uplink and downlinks on different frequencies. And I think that’s what we are working with the whole ecosystem to see and that of course can drive a lot of investment. And that is also one of the main pillars how we can handle the increasing data flows that we can combine frequencies in the future. And now there is of course new technology. And the third one is definitely more spectrum.

Thank you, Hans and thank you, Simon. Are you happy with that?

Yes, thank you for the help.

Thank you. Before letting Hans conclude this, I would like to invite all of you to the CMD, the Capital Markets Day in November 10, listen to Hans and Jan today it’s going to be very interesting with a lot of talk about other areas, etcetera. So, you are welcome to Stockholm on the November 10 with a dinner before on the 9. So please, Hans?

No. My summary will be fairly simple. I mean, again, I think we are in the midst of a transformation. I hope that U.S. industry analysts and investor analysts see that what we are trying to achieve. I think we have good traction in many areas. We are working with both in the course, but also with the target areas. We see also that we have an improved core business which was also target that this management put up. And I think that we – I think I would say that this quarter is very stable sort of next step in our process. And we will be very happy to meet at the Capital Markets Day where we will go deeper down the drivers for these different target areas, where we have selected them, how we see them growing, how we are performing in the markets and how we can be the world leader in those as well. So, I think that’s the summary, Peter. Thank you very much.

Thank you. This now concludes our conference call. Thank you for attending. You may now disconnect your lines.