Top 5 wireless infrastructure companies

Nokia’s purchase of Alcatel-Lucent has reduced the number of radio access network equipment makers that supply the major carriers. There are now five major players instead of six. Two are based in Scandinavia, two in China and one in South Korea.
1. Huawei
With $35.3 billion in sales last year, Huawei’s carrier business group became the world’s largest vendor of telecom network infrastructure. Huawei’s equipment has been a major part of LTE rollouts in China, East Asia, Europe and many emerging markets.
In the United States, Huawei is effectively locked out of the market for network equipment because of political concerns. Members of Congress have asked U.S. carriers to not install the Chinese company’s equipment in their networks. Huawei has said it is experiencing excellent growth even without U.S. carrier customers. Huawei is not prohibited from working with U.S. carriers in other countries, and its equipment is part of AT&T’s networks in Mexico, which AT&T acquired via its purchases of Iusacell and Nextel Mexico.
Huawei’s carrier business represented almost 60% of the company’s overall sales last year, with smartphones and other consumer devices making up 33% of the business, and enterprise sales 7%. The consumer business is growing the fastest, with sales up 73% last year. Enterprise sales were up 44% and carrier sales were up 21%.
2. Ericsson
The Swedish giant has stumbled here and there over the past few years, but in general its products are still seen by many as the gold standard of wireless infrastructure for the macro network. Ericsson’s sales were just under $30 billion last year, and just half of that ($14.9 billion) was network equipment. Network services – building, maintaining and managing wireless networks – made up 44% of the company’s sales, and the remainder came from support services, which included Ericsson’s fast-growing telecom software and media businesses. All of Ericsson’s business units posted sales increases last year, with network equipment sales up 5.3% and the other two segments both posting double-digit sales increases.
In April, Ericsson said it will restructure its business into the following divisions, starting in July:
• Network products, headed by Arun Bansal.
• Network services, headed by Fredrik Jejdling.
• IT and cloud products, headed by Anders Lindblad.
• IT and cloud services, headed by Jean-Philippe Poirault.
• Media, headed by Per Borgklint.
In addition to these business units, Ericsson will form an industry and society customer group headed by Charlotte Sund.
3. Nokia
Nokia completed its $16.6 billion purchase of Alcatel-Lucent in January, and in May the combined company reported its financial results for the first time. Net sales for the first quarter were $6.3 billion, which would suggest the combined company will have roughly $25 billion in annual sales. First quarter sales for the combined company’s network business were $5.7 billion, down 8% from the previous year. Nokia’s network business now includes four divisions: mobile networks, fixed networks, applications and analytics, and IP/optical networks.
In the wake of the merger Nokia is cutting jobs that are redundant between Nokia and Alcatel-Lucent. The company has said headcount reductions will take place during the next three years. Nokia has already announced plans to cut 2,400 jobs in Finland and Germany. The company promised the French government that it would not cut jobs after the merger.
In the U.S., Nokia traditionally trailed Ericsson and Alcatel-Lucent in the market for wireless infrastructure, but even before the Alcatel-Lucent acquisition the company was making significant inroads. Nokia bought Chicago’s SAC Wireless to boost its infrastructure services and distributed antenna systems businesses, and also has some traction with both T-Mobile US and Sprint. Nokia is an equipment and network services vendor for T-Mobile US, a vendor for the Sprint Spark network upgrade, and a small cell vendor for Sprint.
4. ZTE
China’s ZTE has not released its final financial report for 2015, but estimated revenue was $14 billion to $15 billion for the entire company. Like Huawei and Samsung, ZTE makes mobile devices as well as network infrastructure equipment. The company does not report results for its network infrastructure segment separately.
ZTE recently obtained interim relief from U.S. sanctions that analysts said could have been crippling to the company. Those sanctions were imposed by the U.S. Commerce Department after the agency obtained internal ZTE documents that showed how the company was trying to circumvent U.S. rules that prohibit the resale of American technology to Iran and several other nations.
5. Samsung
Wireless network equipment is a very small part of Samsung’s overall business. The Korean conglomerate’s information technology and mobile communications business declined 7% last year to $87 billion, of which an estimated $85 billion was mobile device sales and $2 billion was network infrastructure. SK Telecom is probably Samsung’s biggest customer for network gear. Samsung is also a part of the Sprint Spark initiative.
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