The world's leading mobile telecoms equipment manufacturer Ericsson was hit by a sharp drop in sales of networks in the second quarter as carriers cut spending in the face of a global slowdown.
Makers of network hardware, such as radio base stations, face lean times as major economies weaken, hitting telecoms operators' revenues, and a decade-long price war continues to rage. Ericsson (Stockholm, Sweden) rivals Alcatel-Lucent (Paris) and Chinese group ZTE (Shenzhen, P.R.C.) have both issued profit warnings in the past week.
Network equipment makers have been facing slowing demand for their products as telecom carrier customers cut spending amid a sluggish U.S. economy and weakness in Europe. This hold true for both Acme Packet and Adtran, who reported shares at their lowest in two years, while Calix reported that shares have dived to their lowest ever.
The world's largest mobile phone company, Vodafone Group, has shaved $1.5 billion, and possibly more, off the taxes its UK operating unit might have paid in the past decade, thanks to accounting factors not seen at other European units.
KPN shares fell almost 5% on Friday as investors dumped stock after Mexican billionaire Carlos Slim's telecom group America Movil increased its stake in the Dutch company to 21%, part of a strategy to increase Slim's presence in Europe.
Slim's America Movil, which has already obtained a stake in Telekom Austria, increased its KPN ownership to 21% on Thursday and has said it wants to obtain a maximum of 27.7%.
KPN may unleash a risky "poison pill" defense to stop the bid by Mexican tycoon Carlos Slim for more than a quarter of the Dutch telecom operator, if only to buy time for a side deal with Telefonica that it thinks better values its assets and bolsters its independence.
European telecom operators are planning to charge customers more for faster new fourth-generation (4G) mobile services in the hope of recouping massive network investments and clawing back lost pricing power.
It's a risky approach since it could put off recession-weary customers and slow the adoption of a technology that benefits telcos by lowering operating costs and helping reduce network overload.
The global 2G, 3G, and 4G equipment market decreased 14% to just under $10 billion in the first quarter of 2012 following an 8% increase the previous quarter, reports market research firm Infonetics Research in its new report.
Sprint Nextel Corp has arranged a $1 billion credit facility to buy network equipment from Ericsson for a high-speed wireless project that will involve the shuttering of its Nextel network next year.
Google Inc's Android mobile platform has not infringed Oracle Corp's patents, a California jury decided, putting an indefinite hold on Oracle's quest for damages in a fight between the two Silicon Valley giants over smartphone technology.
In a case that examined whether computer language that connects programs and operating systems can be copyrighted, Oracle (Redwood, Calif., USA) claimed Google's (Mountain View, Calif., USA) Android tramples on its intellectual property rights to the Java programming language.
Mobile operator Vodafone made a writedown of $6.3 billion and cut its medium-term sales target as the debt crisis squeezed customers in southern Europe, forcing them to save money on phone calls.