It's following below the revenue ranking of the main vendors of telecommunications equipments in the world in 1998 and 2006.
This board shows that, the first 4 positions of the ranking in 2006 were the ones which enjoyed all the market changes in the last years:
Alcatel, Lucent and Nortel lost revenue in this period.
The vendors of telecommunication equipments are under increasing pressure from its main customers (the operators) who want to reduce their costs.
Operators purchasing power increased with its consolidation in large groups, with the increase of solutions and with the entry of new suppliers in the Asian market as Huawei and ZTE.
This process led to joint ventures such as Alcatel with Lucent and Nokia with Siemens resulting Nokia Siemens Networks since the 2nd quarter of 2007 (2Q07).
Joint Ventures are also necessary cause these vendors have to continue investing in research and development. Ericsson, for example, invested U$3 billion in the first 9 months of 2007. Ericsson bet its future on the development of 3G technology with standards such as LTE. Other vendors, such as Nortel bet on new technologies for example Wimax to gain market. Part of this investment goes to the acquisition of companies that dominate new technologies. The growth of Cisco, for example, was reported in the acquisition of companies.
This situation doesn't seem to be stabilized yet. The results of the first 9 months of 2007 shows growth of Cisco which takes the 2nd placement.
Total Net Revenue in 2007
| Jan-Sept/07 | US$ billions |
| Nokia | 47.1 |
| Cisco* | 26.7 |
| Motorola | 22.9 |
| Ericsson | 19.1 |
| Alcatel Lucent | 16.7 |
*Oct/06 to Jul/07
Revenue withou cell phones |
Cell Phones Revenue |
|||
| Jan-Sep/07 | US$ billions |
Jan-Sep/07 | US$ billions |
|
| Cisco* | 26.7 |
Nokia | 35.4 |
|
| Ericsson | 19.1 |
Motorola | 14.2 |
|
| Alcatel Lucent | 16.7 |
Samsung | 14.2 |
|
| Nokia Siemens** | 13.3 |
Sony Ericsson | 12.2 |
|
| Motorola | 8.0 |
LG | 7.7 |
|
*Oct/06 to Jul/07; ** including Siemens results in the Q107
To survive this situation these vendors seek to develop a relationship with operators, a partnership that goes beyond equipments sale.
Eles praticam margens menores no momento de conquistar novos contratos e procuram recuperar a margem no período em que ocorrem os upgrades e expansões.
They practice minors margins at the time of winning new contracts and seek to recover the margin in the period in which occur the upgrades and expansions.
| Type of reqquest | Description | Margins |
| Upgrades | Upgrades of installed base. Short Cicle of requests |
High |
| Expansions | Expansions of installed base. Small projects |
Medium |
| New contracts (Rollouts networks) |
Implantation of new network. Licitation, big projects. |
Small |
Source: Ericsson
Ericsson's revenue with new networks implantation, for example, ranges from 10 and 14% of its revenue with equipments.
Another strategy of these operators is to increase its revenue in services. It represent around 15% of Ericsson's revenue and 17% of Alcatel-Lucent.
This situation also happens in Brazil, with the aggravating technological innovations that have just been introduced with some delay, which stimulates comoditização. The most recent example is the introduction of 3G.
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