Entries by Michael Soper, Senior Analyst

Ericsson’s Biggest Customers and Partners (Operators) Are Holding it Back

Ericsson has competitive technology, but its overreliance on CSPs to purchase that technology and/or scale it into end markets remains a weakness that will continue to hamper the company’s ability to participate more significantly in key growth domains, such as PCN. On the network API and communications application side, progress is being made and some scale is occurring, but Ericsson and its CSP partners are up against relatively fast-moving, well-resourced and more specialized entities, most notably hyperscalers and other digital-native players. Addressing the telecom industry’s weaknesses and shortcomings in these market areas will require more investment in channel development and more robust strategic partnerships with entities such as government contractors, GSIs and niche, domain-specific SIs.

Deployment Services in Telecom Face Post-5G Slowdown, Shifting Market Dynamics and Growth in Fiber Expansion

The deployment services market faces growing headwinds, including communication service provider (CSP) consolidation, open vRAN’s lower installation costs, and reduced demand for site location and construction (SL&C), offset somewhat by hyperscaler spend and 5G rollouts in select developing markets. Hyperscaler investments provide incremental volume to the market, and TBR notes these companies are increasing their investments in access technologies (e.g., Google Fiber). 

Telecom Infrastructure Services Operating Margin Climbs as Shift to Maintenance Services Offsets U.S. Market Decline

Automation, analytics, AI and machine learning will prove critical to helping vendors improve margins. Examples include portions of Nokia’s AVA (Analytics, Virtualization and Automation) portfolio and Ericsson’s Operations Engine. However, with a significant portion of revenue coming from deployment services, RAN-centric vendors will be unable to expand overall telecom infrastructure services margins significantly.