Huawei has achieved marginal growth in its telecom equipment business revenue last year showing that the China-based company’s focus on technology innovation is reaping benefits.

Both Finland-based Nokia and Sweden-based Ericsson reported negative growth in their annual revenues in 2017. ZTE achieved growth in revenue.
Nokia reported sale of 23.22 billion euro (–3 percent) or $28.59 billion in 2017. Nokia’s networks business revenue dipped 6 percent to 20.52 billion euro or $25.27 billion in 2017.

Ericsson, the Sweden-based telecom equipment vendor, reported sales of SEK 201 billion (–10 percent) or $24.06 billion in 2017.

ZTE has reported revenue of RMB 108.82 billion (+7.5 percent) or $17.34 billion in 2017 with a net profit of RMB 4.57 billion.

ZTE generated revenue of RMB 63.78 billion or $10.16 billion from Carrier Networks, RMB 35.21 billion or $5.61 billion from Consumer Business and RMB 9.83 billion or $1.56 billion from Government – Enterprise Business in 2017.

Note: The conversion of euro and SEK into USD is based on today’s live rate. But Huawei has converted CNY into USD on the closing rate on 31 December 2017. ZTE’s conversion is based on today’s rate.

Top telecom equipment makers revenue in 2017

Huawei $45.7 bn
Nokia $25.27 bn
Ericsson $24.06 bn
ZTE $10.16 bn

Huawei is the dominant technology company in the global telecom equipment space with $45.7 billion revenue from telecom gear business.

The difference between Ericsson and Nokia is narrow despite the acquisition of Alcatel-Lucent by Nokia. Nokia, which shifted from its mobile broadband strategy, is yet to bring in big deals after the acquisition of Alcatel-Lucent.

Innovation

Huawei said its annual investment in research and development (R&D) reached CNY89.7 billion or $13.8 billion in 2017, up 17.4 percent compared with 2016. The company has made huge investment despite growing pressure in the U.S. telecom market. Huawei did not reveal specific R&D related investment in its telecom equipment business.

Nokia Networks earlier said its research and development expenditure in Q4 2017 reached 953 million euros without showing any growth.

Ericsson said its investments in R&D increased by over SEK 6 billion in 2017.

ZTE’s R&D spending increased to RMB 12.96 billion in 2017, covering 11.9 percent of revenue.

In addition to Huawei, Nokia, Ericsson and ZTE, technology companies such as HPE, IBM, Oracle, Juniper, Cisco, Dell EMC, Lenovo, among others, rely on telecom operators for their revenue.

The focus on 5G equipment space will spell the growth pattern for Huawei, Nokia, Ericsson and ZTE in 2018 and beyond.

Image source: Amazon

Baburajan K