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
“Total revenues for wireless network equipment reported by the vendors
for 1Q2012 were only US$11.4 billion,” says Jim Eller, principal
analyst, wireless infrastructure. “This is the lowest amount that we
have seen since 3Q2003. First quarter revenues were down 17% from the
The second quarter is not looking much better. Ericsson’s second quarter
results, announced this week, showed just a 9% 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
The big concern is profitability. Ericsson’s second quarter results
showed a 63% 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% to 80% 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.
“Instead of buying new equipment, many operators are choosing to upgrade
existing equipment, which is less profitable for the equipment vendors.
We expect wireless infrastructure spending to be weak for at least two
more quarters, until operators might be able to see a light at the end
of the tunnel.”
Vendor revenues and market shares are tracked by ABI Research’s Macro
Base Stations Market Data. This quarterly market data report tracks base
station deployments by technology, region, and country. The data also
includes forecasts for new deployments, upgrades, and replacements
annually through 2017, as well as operator base station spend estimates
and lights at the end of tunnels.
These findings are part of ABI Research’s Macro
Research Service which includes additional Competitive Analyses, Vendor
Matrices, Market Data, and Insights.
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