Telecom Lead India: Global wireless network equipment
makers reported $11.4 billion revenue in Q1 2012. Q2 is also not looking
better.
This is the lowest amount that we have seen since
3Q2003. First quarter revenues were down 17 percent from the previous quarter,”
said Jim Eller, principal analyst, wireless infrastructure, ABI Research.
ABI Research said wireless infrastructure equipment
revenues hit an eight-and-a-half year low in the first quarter of 2012, and the
second quarter is not looking much better.
Instead of buying new equipment, many operators are
choosing to upgrade existing equipment, which is less profitable for the
equipment vendors. Wireless infrastructure spending is likely to be weak for at
least two more quarters, until operators might be able to see a light at the
end of the tunnel.
The second quarter is not looking much better. Ericsson’s
second quarter results, announced this week, showed 9 percent increase in sales
from the first quarter. Preliminary results this week from Alcatel-Lucent and
ZTE also predict slight increases in revenues, but fall far short of
expectations.
The big concern is profitability. Ericsson’s second
quarter results showed a 63 percent drop in net profit year-on-year. Both
Alcatel-Lucent and ZTE have released profit warnings this week, with
Alcatel-Lucent expecting a loss of around €40 million for the second quarter,
and ZTE expecting a year-on-year decrease of 60 percent to 80 percent in profit
for the first half of 2012.
With continued economic uncertainty around the world, mobile
network operators are holding back on investments in their network
infrastructure,” says Aditya Kaul, practice director, mobile networks.
Telecom investment warning: Verizon Capex may be flat or down
in 2012
Verizon Wireless has spent $7.4 billion as Capex in
first-half 2012.
For full-year 2012, capital expenditures are expected to
be flat to down compared with 2011 capital expenditures of $16.2 billion.
This will create ripples in the telecom infrastructure
industry.
The Capex warning from Verizon Wireless is despite
marginal growth in both profit and revenue.
editor@telecomlead.com
