In 2017, Huawei continued to expand its position with Nokia, Ericsson and ZTE. Its revenue exceeded RMB 600 billion, an increase of 15.7% year-on-year, and its profit reached RMB 47.5 billion, a year-on-year increase of 28.1%. (Editor's Note: For ease of horizontal comparison Large equipment manufacturers' financial reporting data, revenue and net profit are unified into RMB units, using the exchange rate as of December 31, 2017, other data are still in the local currency.
Ericsson, which has dominated communications for a long period of time, fell into a loss-making quagmire in 2017, reaching 27.7 billion yuan, and its revenue decreased by 10% year-on-year to 159 billion yuan. Nokia's merger with Alcatel's two years later has not yet made a profit, resulting in a loss of 11.2 billion yuan. Yuan, revenue fell 2% to 180.2 billion yuan.
In 2017, ZTE’s revenue was 108.8 billion yuan, a year-on-year increase of 7.5%. Net profit exceeded the U.S. government fine, reaching 4.57 billion yuan, an increase of 294% year-on-year.
According to Xin Pengjun, chief editor of the Communications Industry News, according to the Schumpeterian periodic law, the medium-wave period of 9-10 years and the short-wave period of 2-4 years began to appear due to the upgrading of the technology industry. The telecommunications industry is experiencing 4G. In the transition period to 5G, the fluctuation will continue for a long period of time. Effective cold protection is the key to resisting the winter.
Both are the downsides of the wireless access market
In the year of 2017, the winter of the communications industry really came. The income from operator services of the four major equipment manufacturers is a powerful evidence of this phenomenon.
Huawei, the leader, compared revenue growth by 16%. Operators' business only ended at '2.5% increase' with an increase of RMB 7.2 billion. Nokia and Ericsson both entered the down channel. The former revenue decreased by 3% (of which, Nokia Communication revenue decreased from 14.1 billion kronor to 12.8 billion kronor, while the latter decreased by 10% (among which, network product line revenue decreased from 21.8 billion euros to 20.5 billion euros); ZTE's operator business handed over a 'relationship' Decently, the answer is 8%, but the increase is only 5 billion yuan.
Behind the analysis is the downturn in the global wireless access network market.
Huawei disclosed in its financial report that the operator's business was affected by fluctuations in the market investment cycle, with the Americas region having a greater impact and revenue falling by 10.9%. Ericsson also pointed out in the financial report that the decline was due to a reduction in LTE investment in mainland China and Southeast Asia, India, The completion of large-scale mobile broadband projects in the Middle East and Africa led to early completion.
According to the report from Dell'Oro, the market will continue to decline from 2017 to 2020, entering the weakest period since 2000. It has benefited from China's large-scale construction of LTE networks, and global base station sales reached a peak of US$33 billion in 2014. , But afterwards, annual sales fell by nearly 4 billion U.S. dollars, and it is expected to continue to decline by nearly 6 billion U.S. dollars. Until 2021, 5G will be built on a large scale, and the market will pick up.
The capital expenditures of China’s three major telecom operators further corroborated the report of Dell’ Oro. The annual reports of the three operators show that the capital expenditure in 2016 was 350.1 billion yuan, which was a significant drop of 20% compared to 2015; the capital expenditure in 2017 was 388.3 billion yuan, Decrease by 12% in the previous year.
Independent telecommunications observer Fu Liang told the "Communications Industry News" (Net) that, in fact, as long as 10 years ago, after the global 3G construction boom faded, it was difficult for equipment manufacturers to rely solely on basic communication services to ensure positive revenue and profit. With growth, it was only then that there was a story of 'Ericsson to the left and Huawei to the right'.
The cold winter will continue for a long time.
China’s three major telecommunications operators decided to further reduce capital expenditures by 2018. Telecom CAPEX is expected to be 75 billion yuan, a 15.5% decrease from 88.7 billion yuan in 2017; mobile CAPEX is expected to be 166.1 billion yuan, down from 177.5 billion yuan in 2017 6.4%, of which the 4G network was reduced from 65.7 billion yuan in 2017 to 58.5 billion in 2018; China Unicom's investment in 2018 is expected to be no more than 50 billion yuan, of which 37% is invested in mobile networks.
Effective cold protection is the key
Under the cold winter, it is the key to effective cold protection.
Xin Pengjun pointed out that the so-called winter is only the winter of traditional communication equipment market. In fact, the ecology of the communications industry has long been reconstructed. In addition to mobile equipment and basic fixed-line networks, the new network element has become very diverse. Servers, software, services, and white boxes are replacing traditional communication devices. Traditional computer rooms have been restructured into next-generation data centers. Investments in large connections, pan-intelligence channels, big data, cloud computing, Internet of things, CDN, and network security have become investments. Hot spots, and the ascendant.
Huawei disclosed in its annual report that in order to get rid of the fluctuation of the investment cycle in the wireless market, Huawei has made efforts in the Internet of Things (IoT) and video fields, and has continued to promote the cloud-wide strategy.
In the area of the Internet of Things, Huawei deployed more than 500,000 NB-IoT base stations globally, with more than 10 million commercial connections, and built an IoT ecosystem with more than 1,000 ecological partners. In the area of network reconstruction, Huawei has signed more than 350 globally. NFV and 380 SDN commercial contracts, deployed more than 30 CloudAIR wireless cloud cloud commercial network.
It is worth mentioning that aiming at the trillion-level public cloud market, in 2017, Huawei set up a separate Cloud BU to formally enter the public cloud market. By the end of 2017, Huawei Cloud had gone online to 14 categories of 99 cloud services, as well as manufacturing, Medical, e-commerce, car networking, SAP, HPC, IoT, etc. More than 50 solutions. ZTE is also forcing emerging technologies such as Internet of Things, chips, cloud computing, and big data. In 2017, ZTE released the first Chinese independent research and development NB-IoT secure internet of things chips, and conducted NB-IoT tests and business demonstrations with multiple operators around the world. In the corporate business, the core products of the financial market continued to break through the state-owned Daxing Bank. GSM-R products fully broke the railway C3 market.
Compared to Huawei and ZTE's multiple strikes, Ericsson’s more important task at the moment is to “save throttling” and effectively stop. Ericsson’s CEO, Bao Yikang, bluntly says that he is “very dissatisfied with his performance”. He said at a recent shareholders’ meeting 2018 The important task of the year is to 'stabilize operations and streamline organizational structure'.
The streamlining of the organizational structure includes the identification of 42 non-strategic contracts in the field of telecommunications service management, of which 23 have been withdrawn or renegotiated in 2017; in the digital service area, product roadmaps and project delivery have gradually stabilized, and 45 have been identified. A non-strategic contract or non-effective contract, of which about 50% should be terminated or withdrawn in 2018.
At the same time, it drastically cut down the cost of media business and stripped most of its media solutions business; it dismissed Ericsson’s power module business and about 20% of the United States’ number portability services; completely or partially abandoned non-strategic fields, including fiber laying, operation and maintenance Services and industry and social sectors.
Bao Yikang said that in order to improve profitability, Ericsson aims to reduce costs by at least SEK 10 billion by 2018 compared to 2017. By the end of 2017, Ericsson had achieved a cost saving of SEK 6 billion.
Nokia's goal is to ensure that the improvement of the market conditions is achieved by 2020, achieving a EUR 0.37-0.42 per share, steady and positive positive free cash flow. In response, Nokia CEO Su Li stated that in order to significantly improve its performance, we will adopt a Nokia's unique approach: Strictly guarantees execution, attaches great importance to cost management, and is actively committed to continuously innovating and maintaining technological leadership to meet customer needs.
At present, the rapid development of Nokia Technology has injected a strong boost to Nokia's overall performance. Nokia disclosed in its annual report that the compound annual growth rate of recurring authorized revenue is expected to reach 10% between now and the end of 2020. At the same time, Nokia Fully attack the Internet of Things market, the vertical business market can be pre-phased.
Grab 5G
In the empty window period of network upgrade, the four major equipment manufacturers are actively preparing for 5G. Some experts predicted that 5G will be the era when the equipment market was rewritten.
From MWC2018, it can be seen that 5G smoke has started. Needless to say, after the end of the first non-independent networking 5G NR standard, the 5G technology selection path has been clarified and officially entered the pre-commercial phase. Whoever grabs the leading position will undoubtedly To a large extent determine the future 5G market trends.
On the MWC2018, Huawei announced the launch of the first 5G chip based on the 3GPP standard Baron 5G01 and the first 3GPP standard 5G commercial terminal CPE based on this chip. Although this chip is considered to be a bit tricky in the standard concept, it is undeniable that Huawei The layout in the 5G field is already in the leading position.
Huawei announced that it will launch a full-scale 5G network solution for large-scale commercial use in 2018, a 5G Kirin chip will be introduced in 2019, and a 5G-enabled smartphone will be launched simultaneously.
Huawei announced that it has conducted 5G pre-commercial testing with more than 30 leading operators in more than ten cities around the world. Ericsson said that Ericsson has gained an advantage in the 5G market and has won half of the world's 5G contracts so far.
Ericsson also brought 5G ready platform. It has not taken the lead in launching the '5G Wireless Point System'. This system will solve the 5G indoor coverage problem.
Ericsson believes that there are three segments in 5G: Enhanced Mobile Broadband, Fixed Wireless Access and Internet of Things, where Internet of Things operators have the greatest potential for development.
Nokia also considers the ever-exploring 5G commercial deployment as a key node that affects 'operating profit margin in 2018'. Nokia said that it will continue to increase its R&D investment in 5G and continue to promote 'continuous expansion into the new vertical market.' Establishing a strong independent software business to achieve the maximum value of authorized business' strategy.
'In 2019 and 2020, our market conditions are expected to improve significantly with the full launch of 5G networks. With the launch of 5G networks, Nokia will continue to gain significant advantages. Unlike previous generations of technology, 5G networks The need to achieve the harmonization of all network elements is far beyond the scope of wireless. And our end-to-end product portfolio and 5G Future X architecture can precisely meet this requirement. ' Nokia disclosed in the annual report.
ZTE also frequently makes 5G strong voices. Recently, China Mobile has launched the first 5G phone in China, and it has also made headlines. Suddenly, for ZTE, 5G is of great significance and will become its narrowing and other three devices. The key opportunity period for business volume.
In 2017, ZTE focused on the 5G end-to-end solution and invested fully in standard formulation, product development and commercial verification. At present, it has established a 5G R&D team with more than 4,500 employees to open up the entire product range of connection, bearer, business, and terminal. To achieve '5G technology, commercial, economies of scale' three leading.
Currently, ZTE has established a 5G strategic partnership with more than 20 operators around the world to jointly promote the verification and testing of 5G technologies and accelerate commercial deployment.
Fu Liang pointed out that although 5G can mitigate the winter challenges encountered by equipment manufacturers to a certain extent, it does not represent all. Equipment vendors still need to have a complete 'cloud management' layout, from 'weak connections' to 'strong connections'. In the communications market continues to stand. In this regard, Huawei and ZTE have already taken the lead.
Since the 1990s when mobile communications has flourished, the communications industry has experienced two winters. In 2000, the dot-com bubble burst and global telecommunications investment nearly stagnated. In 2006, the global telecommunications industry experienced the pains of convergence and migration, and operators reorganized large-scalely. Competition shifts to cost competition.
In the previous two winters, equipment manufacturers passed through various measures to keep the weather cold. For this winter, the same is true. Just as Xin Pengjun pointed out, we believe that no winter will make life difficult and no spring will not come.
