Telecom Lead India: Ericsson has given the first
indication of a possible slowdown in telecom business in the next 1-2 years. If
the largest telecom equipment vendor is facing pressure on revenue targets, the
trend reflects the purchasing pattern of the telecom service providers across
the world. The industry is expecting responses from Nokia Siemens Networks, ZTE,
Huawei, Alcatel-Lucent, etc.
In India, the industry is relying on Reliance Industries,
Reliance Communications, Airtel, Aircel, Tata Teleservices, BSNL, Vodafone,
etc. to up investment in telecom infrastructure. 2G, 3G and 4G will assist the
industry to grow further.
Ericsson has set 2 percent to 8 percent compound annual
sales growth target through 2014 compared with 2011. Last year’s growth target
was 4 percent to 10 percent through 2013.
Operators will hold back on spending in the short term,
Chief Executive Officer Hans Vestberg said in January.
But there are few operators who have increased their
Capex in 2012.
China Telecom to up capital expenditure by 9% to $8.54 billion
in 2012
China Telecom will increase its capital expenditure by 9
percent to $8.54 billion in 2012. China Telecom reported $2.6 billion profit in
2011. Its Revenue rose 11.7 percent to $39.5 billion.
Ericsson India clocks 13 percent increase in 2011 income at SEK
9.8 billion
Ericsson India posted SEK 9.8 billion in 2011 revenue,
registering 13 percent increase over SEK 8.6 billion in 2010. India sales
decreased 46 percent in Q4 2011 year-over-year to SEK 1.5 billion.
Networks sales in India were positively impacted by the
initial 3G rollouts in the first half of the year. Regulatory uncertainty,
particularly around mergers and acquisitions as well as spectrum trading
policy, contributed to a slowdown in infrastructure investments in the second
half of the year.
In 2011, global mobile broadband business assisted
Ericsson to report 12 percent increase in revenue to $33.6 billion globally.
The company retained a target of 5 percent to 15 percent
growth in operating profit and a plan for cash conversion of at least 70
percent annually, according to a report in Bloomberg.
The market for radio base stations and related equipment
reduced 8 percent in Q4 2011 after growing in the first nine months to produce
a 15 percent expansion rate for the year, said Stefan Pongratz, an analyst at
Dell’Oro Group.
North American carriers spent less on older mobile
broadband networks using the CDMA standard as they shifted to 4G, Ericsson said
in January.
Ericsson’s share of radio equipment increased to 37.9
percent from 33.5 percent in 2010. Huawei was the second-largest vendor with
20.8 percent market share, followed by Nokia Siemens at 19.1 percent.
editor@telecomlead.com
