Ericsson saw a fall in profits during the final quarter of 2009, as an increasing number of consumers looked elsewhere for mobile broadband services.
Sales dropped by 13 per cent between October and December as consumers turned away from third-generation mobile technology devices.
A 92 per cent fall in profits was also witnessed, leaving the Stockholm-based firm to consider making redundancies.
Hans Vestberg, President and Chief Executive at Ericsson, said a shift from voice telephony to mobile broadband investments had continued.
He added: "Users and traffic are increasing rapidly and will eventually connect billions of people to the internet.
"This shift is not yet offset by the growth in mobile broadband and investments in next-generation IP networks."
Earlier this month, Shaun Collins, Managing Director at analyst house CCS Insight, said increased competition in the mobile broadband market was driving the sector forwards.