The decrease in Ericsson’s and Nokia’s revenues and sales is the result of no government incentives to develop digital infrastructure and global economic environment.
In their first quarter report 2024, Ericsson and Nokia explained that the cause of the revenue and sales slowdown is related to a continued cautious Capex spending and other aspects related to the economic environment.
“We hadn’t the best stimuli in Latin America for the deployment of digital infrastructure, that affects the telecommunications and connectivity companies, they have been affected in one way or another in their numbers”, explained Jorge Fernando Negrete, CEO of Digital Policy and Law Group (DPL).
In Latin America region, the finances of the operators has been affected and the governments have not executed spectrum tenders for 5G, therefore you have connectivity companies such as Nokia, Ericsson and even Huawei in the closet, said the specialist.
About North America companies results, exists many international geopolitics issues related with United States versus China and Europe versus United States and, for this reason, 5G technology has not been viewed favorably, commented Negrete.
On the other hand, operators face a big challenge with OpenRAN that goes against the proprietary technologies that Ericsson and Nokia own.
In North America, Ericsson reported in the first quarter a fall of 17% in sales YoY as a result of a lower level of 5G capex investments. In the case of Latin America, the sales declined 7% YoY “as a result of the continued cautious capex spend among most operators”.
Nokia’s first quarter results showed a decline of 41% net sales as a result of particular weakness in Mobile Networks in Americas region.
North America witnessed weak net sales driven by low levels of deployment activity, explained the company.
“As expected, the demand environment remained weak in the first quarter. The business continued to experience headwinds which were largely related to macroeconomic uncertainty”, said Nokia in the first quarter report.