Global Telecom Capital Investment Has Fallen in 2012

By

What seems like an endless wave of job cuts in the telecom equipment supplier industry has been going on for more than a year, separate from the background shrinkage for more than a decade.

Among the latest is Ericsson, the largest global supplier of mobile network infrastructure, according to Bloomberg.

Ericsson AB reported a 43-percent decline in third-quarter profit as wireless operators curbed spending in a sputtering economy.

Net income fell to 2.18 billion kronor ($324 million) from 3.82 billion kronor, Stockholm-based Ericsson said today. Gross margin, or the percentage of sales remaining after production costs, slid to 30.4 percent from 35 percent, missing the 32.2 percent average of analysts’ estimates.

The clear evidence of investment in Long Term Evolution notwithstanding, it is clear enough that other projects are being postponed. Telecom capex fell in the wake of the Great Recession of 2008, as would be expected.

Spending picked up by 2010, but it now appears more stringency has returned. 

The problems are arguably centered in the European markets. Mobile capital expenditure in Western Europe contracted 3.8 percent quarter-over-quarter in the first half of 2012, even though mobile operators are building out coverage for 4G, and to a lesser extent enhancing capacity and coverage of their 3G networks, according to ABI Research

Year-over-year growth was down significantly - 19 percent. 

“Overall capital expenditure for the region is expected to drop 12 percent to $14.4 billion for the full year of 2012. Western European carriers are at different stages in development, which will very likely affect 4G adoption patterns,” said Jake Saunders, VP for Forecasting at ABI Research.




Edited by Braden Becker

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More