Wireless infrastructure market at 8-year low; more pain to come
By Anthony Capkun
July 19, 2012 – According to ABI Research, wireless infrastructure equipment revenues hit an 8.5-year low in the first quarter of 2012, and Q2 is not looking much better.
“Total revenues for wireless network equipment reported by the vendors for 1Q2012 were only $11.4 billion US,” said Jim Eller, principal analyst, wireless infrastructure, with ABI. “This is the lowest amount that we have seen since 3Q2003. First-quarter revenues were down 17% from the previous quarter.”
Ericsson’s second quarter results showed a 63% drop in net profit year-on-year, notes ABI. 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,” explained Aditya Kaul, practice director, mobile networks, ABI. “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 Basestations Research Service.