Friday, April 21, 2006

Ericsson proves that scale is key in telecom networks delivery

Ericsson announced the results for their latest quarter today and delivered weaker earnings and margins, due to the integration of Marconi, but revealed a solid bounce in revenues over a year ago (nearly 20%).

Ericsson and Alcatel/Lucent look set to drive the telecom network equipment market going forwards - for they have the focus and the scale. And they will need it to compete in a world where their customers will get larger and larger through competition and aggressive new Chinese compettors will take share and drive margins down (further).

It makes you wonder when Nortel will consider an acquisition/sale and when Nokia and Motorola will spin out their network divisions.

In the mean time - the future looks bright for Ericsson and the mobile industry in general and Ericsson remind us that “The evolution to mobile broadband is accelerating. This new powerful HSPA technology dramatically improves the consumer experience of new multimedia services such as mobile office, music and mobile TV,” said Mr Svanberg. “We have a clear lead and are rolling out HSPA networks in four continents.”

Two more WCDMA networks were launched during the first quarter, bringing the total number across the world to 93, 50 of which are supplied by Ericsson.

Ericsson said that long-term industry growth drivers “remain solid” and the number of mobile subscriptions continued to grow, primarily driven by emerging markets. They also said the global number of mobile subscriptions was expected to pass the 3bn mark in 2007.

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