HomeInsightsEricsson and Nokia 3Q results show moderate networks growth

    Ericsson and Nokia 3Q results show moderate networks growth


    Sales up, but not by much

    Third quarter results from Ericsson and Nokia show that mobile network sales continue to grow moderately, fuelled mostly by emerging market needs, and to a lesser extent by mobile broadband demand.

    Nokia made 27% more in sales (EUR1.8 billion) from its networks division in the 3rdd quarter 2006 against 3Q 2005, but recorded operating profit for the division down 17%. Mobile phone sales were up 14% year on year for the quarter, and it multimedia division’s sales were up 45%282

    Ericsson’s mobile network sales were up 5% quarter on quarter at EUR 3 billion (SEK28 billion), and down 9% on the second quarter of this year. Mobile networks sales are up 8% overall for the first nine months of 2006 compared to 2005. Fixed networks sales are up 121% on the quarter year on year and 138% up on the nine months to date year on year – much of which was accounted for by the Marconi acquisition.

    Ericsson’s Western Europe sales were up by 19% compared to the same quarter last year. It said that growth has been primarily driven by strong services sales and high demand for transmission and fixed broadband access. Mobile systems sales were flat, although the company said HSPA, is “gaining traction”.
    In Central and Eastern Europe, Middle East and Africa sales grew by 24% compared to the same quarter last year. Countries in Africa and the Middle East are showing strong growth, primarily in GSM, driven by the need for cost efficient coverage. But there is also a growing demand for mobile broadband, Ericsson said.

    Nokia said that most of the growth in its network sales came from emerging markets, and that growth into the fourth quarter would be at a lesser rate than prevous years. Overall, the company expects only moderate growth in the mobile infrastructure market in 2006.

    It said it is still on course to begin operating as a merged entity with Siemens Networks in January 2007.

    As for handsets, the company says it thinks device volumes across the market will grow by 15% or more in the fourth quarter sequentially, with Nokia holding on to its current market share. Nokia expects the mobile device market volume will be approximately 970 million units in 2006, while its estimate for 2005 was approximately 795 million units.