The Swedish telecommunications equipment provider Ericsson has announced that it expects an additional charge in connection with the purchase of the Vonage cloud communications subsidiary, two years after the deal to expand in the USA was completed.

Ericsson announced on Wednesday that a non-cash charge of $1.1 billion would be recorded in the second quarter, after Vonage's current portfolio showed lower growth rates than expected.

This burden occurs as Vonage redirects its investments towards strategically prioritized areas after the market environment has deteriorated, said Vonage CEO Niklas Heuveldop.

Already last year, Ericsson announced that it would book a quarterly non-cash impairment of $2.9 billion to reflect the sharp decline in the stock prices of Vonage peers, higher interest rates, and a general slowdown in Vonage's core markets.

Ericsson completed the acquisition of the American company Vonage in 2022 to expand its mobile network business and transform the use, consumption, and payment of advanced 5G network capabilities. At that time, it was the largest acquisition in Ericsson's history.

So far this year, Vonage has announced cooperative agreements with telecommunications giants such as Verizon and AT&T to provide advanced 5G network application programming interfaces (APIs). APIs are sets of routines, tools, and protocols for building software applications.

Vonage continues to show positive momentum in the area of mobile network operators, while the company makes progress in the 5G field, said Heuveldop.