5G burns money beyond expectations, Nokia loans 4 billion, and Huawei Ericsson loses competition

5G burns money beyond expectations, Nokia loans 4 billion, and Huawei Ericsson loses competition
On March 9, Nokia disclosed that it obtained a loan of 500 million euros (about 4 billion yuan) to develop 5G.Earlier, while announcing profit growth in the fourth quarter, Nokia warned the outside world that market demand would remain stable and that competition involving 5G transactions would become more intense in the coming year.Faced with competition from China’s Huawei Technologies Co., Ltd. (hereinafter referred to as “Huawei”) and Sweden’s Ericsson, Nokia also hopes to gain control of the 5G technology market, but so far, the company’s situation has been ups and downs.In the Chinese market, demand changes in 2020 are not obvious, and the delay in the merger of T-Mobile and Sprint in the North American market has led to uncertainty, and after a court in India ruled that mobile network operators must pay retroactive licenses and spectrum fees,Leading to weaker market demand.Nokia changes coaches, former CEO bets on US market failure?As of last month, Huawei announced that it had obtained 91 5G commercial contracts, while Ericsson and Nokia had 81 and 68 contracts respectively.Nokia is at a disadvantage in its competition with Huawei and Ericsson.Earlier on March 3, Nokia appointed PekkaLundmark as the new president and chief executive officer, while RajeevSuri, who has worked for Nokia for 25 years, announced his resignation after holding this position for many years.RajeevSuri ‘s biggest bet during his tenure was that in 2016, he acquired his peer Alcatel-Lucent for 17 billion US dollars (about 118 billion yuan), which was formed in 2006 by the merger of Alcatel-based France and Lucent-based United States.The chip is the integration of mobile broadband and Wi-Fi technology, but this is still inconclusive.Facing Huawei’s competition, William Barr, the US Attorney General and former Verizon executive, hinted in February that the United States would hold a controlling stake in Nokia or Ericsson.However, this proposal was quickly rejected by the White House in the United States, and Cisco CEO Chuck Robbins also publicly stated that it will not acquire Nokia and Ericsson, and said that infrastructure construction does not meet its financial status or strategy.It is worth noting that Lucent Technologies Co., Ltd. is a telecommunications equipment company established after the spin-off from At & t in the United States in 1996.In this regard, an industry analyst told Sauna and Yeewang that the United States lacks a communications equipment vendor to help it promote the development of the entire market, especially the millimeter wave landing in the United States is not as good as expected, and the commercial value is not reflected.So fast.There is a view that Nokia’s sky-high acquisition of Alcatel-Lucent has affected its investment and attention in 5G.Nokia sales fell 1% in 2019 to 14.900 million euros (about 16.$ 900 million).Public information shows that Pekka Lundmark, Nokia’s upcoming CEO, held various management positions at Nokia from 1990 to 2000, but he is currently the president and CEO of Fortum, which is also headquartered.State-owned energy company in Espoo, Finland.Nokia’s official website introduced him, “It has brought considerable returns to Fu Teng’s shareholders, successfully reformed the company’s strategy, and positioned it as a transforming global energy powerhouse.”Although time may benefit Nokia ‘s investment, as the new boss, the first thing PekkaLundmark has to do is evaluate and find out the problem.The above-mentioned industry analysts said that Pekka Lundmark, as a key man, does not rule out the reorganization of assets after entering Nokia, which is usually a step before the sale of assets.The demand for 5G networks is not as big as imagined. Although industry experts are optimistic about the increasing demand for the 5G market, it is not a good thing for the financial situation of communication equipment manufacturers.From the current perspective, the demand for 5G networks is not as huge as imagined.Borje Ekholm, CEO of Ericsson, once made such a judgment that it needs to face the loss of short-term profits in exchange for more strategic contracts.The price of Ericsson ‘s equipment is lower than that of Nokia, which is part of the reason why Nokia directly lowered its profit forecast and canceled its dividend.The two European equipment manufacturers are tightly engaged.Huawei ‘s rotating chairman Xu Zhijun also proposed that its sales in 2019 will increase by 18% year-on-year, suggesting that it is actually slightly lower than the forecast at the beginning of the year, and pointed out that the growth rate in 2020 will be lower than in the first half of 2019.It is becoming more complicated and the downward pressure on the world economy is increasing. ”At the same time, the company launched a plan to streamline talents, and 10% of the supervisors will be eliminated.For the next market expansion, many interviewed analysts said they were not optimistic about the changes in the pattern.Cui Kai, an analyst of the third-party IDC communications industry, told Sauna and Yewang that the pattern in China, North America and Europe is relatively fixed. The three major equipment vendors have the opportunity to fully compete, and only the remaining countries in the Middle East and Asia-Pacific markets.On March 6, China Mobile released the announcement of the centralized procurement of 5G Phase II wireless network main equipment in 2020. The bid winners were controlled at 2 to 4, and the corresponding shares were divided, up to 50% to 60%.The second is 20% to 30%, that is to say, the remaining cake is only 10% to 30%.In addition to the three major equipment vendors, ZTE is also considered to have a corresponding share, which makes the competition between Ericsson and Nokia more intense.Ericsson has taken the lead.In order to offset the weakness in the North American market due to the obstruction of the merger of the two major telecom operators, it will increase its dividend and believe that telecom operators in Asia and the Middle East will continue to invest in 5G.However, for the three major communication equipment vendors, the common key word is to overcome difficulties.Xu Zhijun said that 2020 will be a difficult year for Huawei, and it will continue to be under the “entity list”; Ericsson needs to solve the painful transformation since the beginning of 2014, and needs to eliminate the series of impacts brought by the early judicial proceedings;Under the turmoil, it was announced to replace the CEO, and the chairman of the board of directors will be changed later.Cui Kai told the sauna and night network that for communication equipment vendors, participating in the construction of 5G networks requires a more powerful and comprehensive ability to provide end-to-end solutions, which requires them to support not only wireless but also fixed networks.The entire company’s product portfolio should be very comprehensive, and as telecom operators focus on energy consumption, the corresponding technology needs to be upgraded.The impact of the new coronavirus epidemic on the first quarter has not yet affected IDC’s expectations for the full-year market.Another reason is cautious investment in downstream telecommunications operations.The eMBB (enhanced mobile broadband) that has been clearly defined can be fully supported using the existing architecture, but for the mMTC (Great Connected Internet of Things) and unmanned driving that are commonly concerned by 5G networks, URLLC (ultra high reliability and ultra low time) required by industrial automationExtended communication) still need to be discussed and determined.Even if the equipment is not replaced, the software needs to be upgraded, and the change leads to caution, and after the industry chain shifts upward, the sales of communication equipment vendors will also slow down.Sauna, Night Net Editor Liang Chen Xu Chao proofreading Li Xiangling