The telecom network equipment industry can be weathering the toughest part of a decade-long cycle, as demand for 4G as well as older 2G as well as 3G network equipment subsides, while volume contracts for next-generation 5G networks remain a few years out.
Nokia’s network sales fell 9 percent within the third quarter to 4.8 billion euros ($5.7 billion) while operating profit within the business dropped 23 percent to 334 million. Average analyst forecasts in a Reuters poll were 5.0 billion as well as 432 million respectively.
Chief Executive Rajeev Suri said operators’ consolidation as well as technology transitions were slowing demand, while competition in China had toughened.
“The early positioning for 5G can be well underway in which country as well as the cost of gaining or even maintaining footprint can be significant … We want to ensure the right long-term footprint, nevertheless not at any cost,” Suri told a conference call.
“Operator consolidation as well as M&A activity are also creating some near-term headwinds,” Suri said.