Tough 2009 for all, especially non-Asian vendors: results review
Earnings results from telecom network infrastructure (NI) vendors confirm the depth of the 2009 downturn: NI (non-handset) revenues were down 9% versus 2008 to $157 billion. Handset/device revenues for these same vendors, plus Apple and RIM, fell by 6% to $120 billion. Profits were mixed: the last few quarters have seen fewer harsh write-downs but operating profit margins overall fell from 2008 for most big vendors. Vendors gaining share of the NI market in 2009 include Huawei, ZTE, and Samsung, while vendors losing share include Cisco, and three of the largest mobile RAN vendors: Nokia Siemens Networks (NSN), Ericsson, and Motorola. Alcatel-Lucent’s share was stable. Capex outlook for 2010 is good in light of improving macroeconomics, with a reasonably good climate for M&A activity and new vendor IPOs.
Executive summary
In a nutshell
Ovum view
Chinese expansion during downturn
Three tiers of vendors
4G mobile key factor driving market
Global capex fell 10% in 2009, but worst is over: growth is back in 2010
Telecom vendor financial results for 2009
Vendor revenues down 8% overall, with infrastructure hit slightly harder than handsets
The four tier-1 vendors accounted for 54% of global infrastructure revenues in 2009
Infrastructure vendor share shifts in 2009: Huawei biggest winner, NSN lagged
Operating profit (EBITDA) margin results
Net debt positions: several vendors have healthy cash reserves
Vendors included in the database
In a nutshell
Ovum view
Chinese expansion during downturn
Three tiers of vendors
4G mobile key factor driving market
Global capex fell 10% in 2009, but worst is over: growth is back in 2010
Telecom vendor financial results for 2009
Vendor revenues down 8% overall, with infrastructure hit slightly harder than handsets
The four tier-1 vendors accounted for 54% of global infrastructure revenues in 2009
Infrastructure vendor share shifts in 2009: Huawei biggest winner, NSN lagged
Operating profit (EBITDA) margin results
Net debt positions: several vendors have healthy cash reserves
Vendors included in the database
LIST OF FIGURES
Figure 1: Telecom infrastructure vendor revenues: networks and handsets/devices (CY2006–9), US$ billions
Figure 2: Vendor shares of telecom network infrastructure market: $157.5 billion (2009)
Figure 3: Change in vendor share from 2008 to 2009, telecom network infrastructure revenues
Figure 4: Operating profit margins for key telecom infrastructure vendors, 2008–9
Figure 5: Key vendors’ net debt positions at end of fiscal year 2009
Figure 1: Telecom infrastructure vendor revenues: networks and handsets/devices (CY2006–9), US$ billions
Figure 2: Vendor shares of telecom network infrastructure market: $157.5 billion (2009)
Figure 3: Change in vendor share from 2008 to 2009, telecom network infrastructure revenues
Figure 4: Operating profit margins for key telecom infrastructure vendors, 2008–9
Figure 5: Key vendors’ net debt positions at end of fiscal year 2009
