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Economist Weighs in Telecom Suppliers
By Mark Evans | October 26, 2007
The Economist takes a look at the struggles of the major telecom suppliers, highlighted by Alcatel-Lucent, which is expected to post “ugly” quarterly results next week.
There’s nothing terribly new in the story but The Economist does a good job of highlighting the key issues facing players such as Alcatel-Lucent, Ericsson and Nortel.
1. The wireless market - at least in developed economies - has started to mature while investments in new technologies such as 4G and Wi-Max are still simmering as opposed to bubbling. Many telecom carriers are being pragmatic about network upgrades as well.
2. Chinese suppliers such as Huawei and ZTE are taking advantage of lower cost structures to win market share on the strength of lower prices.
3. Many telecom products are being commoditized - a trend that my friend and analyst, Lawrence Surtees, was talking about six years ago. Lawrence was clear that the days of expensive hardware sales were going to be replaced by less expensive software sales - and he’s proved to be right. The Economist contends one of the ways telecom suppliers can get out of this vicious cycle is offering services, including the operation of telecom networks for carriers.
Topics: Technology |