Swedish mobile telecoms company, Ericsson, said yesterday it expected to lose up to £350m in the first quarter of 2001.

Ericsson originally thought it would make a profit this year, but it seems its board misjudged the slowing IT and mobile phones markets.

It attributed some of the loss to its continued investments in third generation mobile technologies.

“We are concentrating on the 3G market,” said spokesperson at Ericsson. “We believe we will see return on our investments as soon as the 3G market takes off.”

But making handsets is making a loss for the troubled firm. Ericsson outsourced the production of its handsets to Flextronics earlier this year.

The company said it would now take further steps to cut costs. But it was unwilling to speculate on where these cuts would be from.