#2 – Infrastructure market
No country for old men
The mobile infrastructure market has been very competitive throughout this decade, something we have witnessed firsthand as sourcing advisor to Operators around the world. As an example of changes, look at how NSN did for period of time not participate in price wars, resulting most of the times in a two-horse race between Huawei and Ericsson when it came to winning contracts. With the new guard at NSN they have changed strategy and are now as aggressive in their bidding as any other vendor. The market has thus gone from very competitive to ultra competitive. Winners, short term at least, are Operators than now can do complete swap-out of old GSM and WCDMA networks to brand new high capacity multi standard networks, including LTE, for price levels that previously were mere down payments for similar deals. For how long can this go on?
Not more than a year in our opinion. Current prices are clearly not at levels that sustainably can support multiple mobile infrastructure players. Our prediction is that the number of global full infrastructure players will be reduced to 3 during 2010. We believe that Ericsson and Huawei are strong candidates for two of the seats, while the number 3 slot will be found among one of Alcatel-Lucent, NSN and ZTE, or a combination…. Two of them has gone through painful mergers this decade, better luck next time?