Hope for wireless infrastructure sector comes from China
Published: 22 December, 2008
Amid the general gloom besetting the wireless infrastructure market, the brightest ray of hope has come from the Chinese operators' 3G build-out plans, and these are expected primarily to boost the country's own vendors. No surprise then, that ZTE and Huawei are showing a far more optimistic face than their European and US rivals.
While Alcatel-Lucent and Nokia Siemens believe their 2009 revenues will fall in line with market decline - which the French giant predicts will be 8-12% and NSN about 5% - Huawei says it is still on course to hit its 2008 target of $23bn in "contract sales" (a metric used by the firm that is not the same as revenues - in 2007, its contract sales were $16bn, but audited revenues were $12.56bn. However, on a similar ratio, that would give the Chinese vendor revenues of about $17bn for 2008). And in 2009, the company is expecting "steady growth from both the fixed and mobile field, especially with the development in the mobile broadband space". As well as China, Huawei is likely to do well in the Indian GSM expansion and 3G roll-outs.
ZTE has not published an official forecast yet but should also profit from Chinese and Indian deals, and said it expects "stable revenue growth" in 2009. During the first nine months of this year, ZTE reported revenues up 29% year-on-year to RMB30.3bn ($4.4bn), and is on course to record a significant full year increase on 2007's RMB34.8bn ($5.1bn). However, its net margins are low, since it competes aggressively on price - 3.6% in 2007 and 2.9% in the third quarter of this year.
Ericsson is also looking resilient against the storm and debt ratings agency Fitch has just affirmed the Swedish company's ratings as 'stable', amid a series of downgrades of other major players like Nokia. Fitch said its confidence revolved around Ericsson's market lead, growing professional services business, healthy liquidity and strong balance sheet. Although margins are under pressure, Ericsson's remain ahead of most of its rivals'.
Related Stories
More IPHONE News
More LTE News
More FINANCIAL News
COMMENTS
Digital Money: The Convergence of Contactless Card and Mobile Payments
This report examines the emergence of digital money from the perspective of the convergence of card-based proximity payments to the...
Cloudbooks: Market Analysis and Forecasts
This report is based on interviews with device OEMs, retailers and resellers and provides a comprehensive analysis of the new cloudbook...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
