Ericsson said it would create one separate business unit for mobile telecom equipment, called Radio, and one business unit called Cloud and IP. Networks chief Johan Wibergh would remain head of both units, Ericsson said.

In a statement, Ericsson Chief Executive Hans Vestberg noted that whereas Ericsson had a clear number one position in mobile telecom equipment, such as radio base stations, it was still a challenger in cloud and IP (Internet Protocol) based communications.

"In a transforming market we will now intensify our work to capture opportunities in virtualization and cloud, building on our leading position in core networks," Vestberg said.

Link to full statement: http://r.reuters.com/qyj78v

(Reporting by Sven Nordenstam; Editing by Alistair Scrutton)