North America is the key telecom market for Ericsson and Nokia. The latest financial performance reports from Nokia and Ericsson indicate their struggle in North America.
Ericsson is the leader in telecom network market in North America considering the revenue it generated in Q1 2024.
Ericsson’s revenue from North America touched SK 13.9 billion or $1.26 billion during the first quarter of 2024.
For comparison, Ericsson’s revenue from North America was SEK 16.9 billion Q1 2023 and SEK 14.4 billion in Q4 2023.
Nokia’s revenue from North America was 1.031 billion euro or $1.09 billion during the first quarter of 2024.
Nokia’s revenue from North America was 1.666 billion euro in Q1 2023.
NOKIA
Nokia’s Mobile Networks revenue decreased 37 percent largely driven by India as 5G deployments continued to moderate after significant investment in the first half of 2023 and by North America, where demand remained weak.
Nokia’s Fixed Networks net sales declined 22 percent, in comparison to a strong year-ago quarter. The decline was mainly driven by North America.
In the America’s region, net sales slowed primarily due to North America, where demand remained weak due to current low levels of deployment activity along with lower market share at one North American customer (AT&T).
Nokia said sales performance in the Americas reflected declines across all three networks business groups, with particular weakness in Mobile Networks, as well as IP Networks, Fixed Networks and Optical Networks within Network Infrastructure. Within the Americas, North America witnessed weak net sales driven by low levels of deployment activity, particularly in Mobile Networks and Network Infrastructure.
ERICSSON
Ericsson’s revenue in North America declined to SEK 13.944 billion reflecting a lower level of 5G Capex investments. However, customer inventory levels have now stabilized, and in the second half of 2024 we will start to benefit from recent contract wins. Ericsson signed a $17 billion deal with AT&T.
Ericsson’s revenue from Mobile Networks – Segment Networks in North America declined 23 percent to SEK 10.764 billion reflecting a lower level of 5G Capex.
Ericsson’s revenue from Mobile Networks – Segment Cloud Software and Services grew in North America.
Dell’Oro estimates that the global RAN equipment market will decline by -4 percent (-4 percent) in 2024. North America is expected to grow by 10 percent to 20 percent (17 percent), Europe to decline by 0 percent to -5 percent (-2 percent) and Mainland China to decline by -5 percent to -10 percent (-7 percent).
Despite challenges, Nokia and Ericsson maintain confidence in the mid-to-long term prospects of the market. However, analysts caution that macroeconomic uncertainties, upcoming elections, and geopolitical tensions continue to pose significant concerns for the industry’s future outlook.
Baburajan Kizhakedath
