Question-and-Answer Session
Operator
Thank you. Our first question comes from Has Malik from Citigroup.
Q – Hasnain Malik, Citigroup
Thank you. I’d like to ask a couple of questions around the fixed-line businesses. First of all, can you confirm that the organic, or the old Ericsson fixed-line business seems to have come on?
Carl-Henric Svanberg
(inaudible)
Q – Hasnain Malik, Citigroup
Hello?
Operator
Our next question comes from Edward Snyder from Charter Equity Research.
Q – Edward Snyder, Charter Equity Research.
Yes, thank you very much. A couple of questions, first regarding the Marconi and the savings that you anticipate, I know they won’t kick in until the second half of the year, but do you have any?
Gary Pinkham
Operator, we can’t hear the question.
Q – Edward Snyder, Charter Equity Research.
Hello? Hello? ?hello, can you hear me now?
Operator
Mr. Snyder, your line is now open.
Q – Edward Snyder, Charter Equity Research.
OK. Can you hear me? Hello? ?can you hear me at all?
Gary Pinkham
Can we try another one operator? Hello, operator, are we having some technical problems?
Operator
I do apologize. Edward Snyder, your line is now open.
Q – Edward Snyder, Charter Equity Research.
Thank you. Can you hear me now?
Gary Pinkham
We can hear you now.
Q – Edward Snyder, Charter Equity Research.
Thank you very much. Regarding the Marconi acquisition, I know most of your savings will accrue in the second half of the year. Do you have any guidance at all regarding how large those will be and where you’ll focus those in terms of the operating line? Then also, in terms of the contributions from Marconi to Western Europe and CEEMEA, can you just give us some guidance on how they actually contributed to the YoverY performance in revenue in either of those geographies, I’d appreciate it. Thanks.
A – Carl-Henric Svanberg
To start from the back, the majority of Marconi sales is coming out of Europe, so that we’ve been pretty specific about. When it comes to the savings, we are as you see, basically we’re at the SEK 200 million operating loss, but you see in the company as well it is the way it was when we took it over. Then starts all the retracting(?) activities that are supposed to lead to – that bring it up to Ericsson margins in 24 months and it should be there in run rate when we leave 2007. All of the activities as such are basically a constant run of activities. The effects on the bottom line will of course start later because there are costs associated with every activity that is there. You will see accelerating layoffs, for example in Q2 and Q3, and they will start to have effect, so you will start to see some more effects in the second half and then of course even more so when the supply chain is in place in 2007. The layoffs of staff will be dealt with by the end of the year and it will take a little bit longer too, to get through all the different activities around the supply chain.
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