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Huawei faces new crisis in America, while struggle for Nokia and Ericsson continues

LTE network in North America
The North America telecom market, the home for AT&T, Verizon, T-Mobile and Sprint, has posed challenges to mobile equipment makers such as Huawei, Nokia, Ericsson and ZTE last year.

Because all big mobile operators are trying to cut down on Capex (capital expenditure) and Opex (operating expenditure) in order to improve their profit, the strategy of Huawei, Nokia, Ericsson and ZTE will be important to increase their revenue in North America.

ZTE did not reveal its financial performance in North America.

Leaders in North America market in 2017

Nokia $7.7 billion
*Huawei $6.2 billion
Ericsson $5.9 billion

Strong presence in North America, the market for most technology innovation, is important for all telecom equipment makers.

Huawei

Huawei’s North America revenue fell 11 percent to 39 billion yuan in 2017. *Huawei’s annual revenue is from telecom equipment, mobile phones and enterprise business. Huawei faced challenging market situation in North America after the decision of main operator AT&T to stop buying smartphones from Huawei.

Reuters reported market share gains in Europe have helped Huawei offset the company’s exclusion from the United States, the world’s most profitable market for phone sellers.

China’s Huawei, the world’s third-largest smartphone maker, posted 28 percent rise in 2017 net profit, driven by cost controls and a solid performance in its home market. Shenzhen-based Huawei saw net profit rise to 47.5 billion yuan ($7.3 billion) in 2017, sharply up from a 0.4 percent increase in 2016. Total revenue of Huawei grew 15.7 percent to 603.6 billion yuan, its slowest growth in four years.

Recently, Federal Communications Commission (FCC) announced proposal to ban telecom equipment from countries that can impact the national security.

Nokia

Nokia’s revenue from North America dropped 7 percent to 6.276 billion euro last year. The Finland-based Nokia is focusing on 5G deals and equipment sales to arrest declines in the North America telecom market.

Nokia CEO Rajeev Suri said: “Networks market will decline again in 2018, though at a slightly lower rate than our previous forecast, given early signs of improved conditions in North America.”

Ericsson

Ericsson, a telecom gear maker based in Sweden, said its North America revenue fell 5 percent to SEK 49.6 billion last year. Ericsson’s North America business unit generated SEK 38.8 billion from Networks, SEK 7.5 billion from Digital Services and SEK 3.3 billion from Managed Services.

Ericsson earlier said North America sales declined, due to re-scoped managed services contract. Networks sales increased slightly, driven by network expansions to cater for increased data traffic. Digital Services sales declined slightly.

Borje Ekholm, president and CEO of Ericsson, said: “For 2018, the Radio Access Network (RAN) equipment market is expected to decline by -2 percent, compared with estimated -8 percent in 2017. The Chinese market is expected to continue to decline due to reduced LTE investments, while there is positive momentum in North America.”

Baburajan K

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