Global telecommunications equipment giant is in full crisis: obviously poor performance

On July 19th, after Ericsson (Weibo) announced its not-so-good financial report for the second quarter of this year, the world's major telecommunications equipment giants seemed to be in a dilemma of overall decline. Although it is currently in the hot summer of the northern hemisphere, this The industry can be described as the severe winter season.

Telecommunications equipment giants are almost in poor condition

The recent unfavourable news of the telecommunications equipment industry has followed. First, ZTE (Weibo) announced the first half results, saying that the net profit attributable to shareholders of listed companies from January to June was between 154 million and 308 million yuan, compared with last year. During the same period, 769 million yuan, a year-on-year decrease of 60% -80%, basic earnings per share 0.04 yuan -0.09 yuan.

Then on July 17, Alcatel-Lucent said that due to the bad economic situation, it will not be able to achieve its full-year performance target this year.

And on July 18, Ericsson announced that the company achieved a net profit of 1.11 billion Swedish kronor (about 158 ​​million US dollars) in the second quarter, a year-on-year decline of 64%. Analysts expected an average of 1.64 billion Swedish kronor; gross margin also rose from 37.8% It shrank to 32%, and analysts on average expected it to be 33.2%.

Earlier in May, Nokia Siemens announced a major layoff due to poor conditions.

In this case, in addition to Huawei (Weibo), the remaining four global telecommunications equipment giants have clearly declared poor performance, and in fact, Huawei's profit margins also fell last year.

Telecommunication equipment market slump

Affected by this, the above-mentioned telecommunications equipment giants have plunged in share prices recently. It is generally believed that the poor global economic environment and the telecommunications equipment industry have encountered ceilings, which is the main reason for these telecommunications equipment giants.

IT research company Gartner's report shows that due to the impact of the European debt crisis and the global economic weakness, the scale of global telecommunications equipment spending will only increase by 6.9% this year to 444 billion US dollars, an increase of less than 7.7% last year.

British research company Ovum has made similar trend expectations. The company's report shows that in 2012 telecom operators' spending growth rate will drop to 5.5%, while last year's spending growth rate was 12.2%.

Either go bankrupt or lay off

In fact, the global telecommunications equipment giant has experienced many years of shock. A few years ago, there were about 9 mainstream global system equipment vendors, including Ericsson, Nokia, Siemens, Alcatel, Lucent, Nortel, Motorola, Huawei, and ZTE. Today, nine have become five, four have merged into two, Motorola has sold its network department, and Nortel simply went bankrupt.

Of these five, only three can maintain sustained profitability. That is Ericsson, Huawei, ZTE, Nokia Siemens and Alcatel-Lucent are all volatile.

Under such circumstances, layoffs are inevitable. According to Noci's reorganization plan, it will lay off 17,000 people by the end of 2013. Ericsson had previously laid off 1,400 people in North America. When Alcatel-Lucent released its fourth quarter 2011 financial report in February this year, it said that the company would lay off 1,800 people in Europe.

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