OYet he had rolled out the red carpet for them. A new technology, the elimination of the Chinese world leader, Huawei, no more competitors in sight, even in America… Ericsson and Nokia had a path to prosper for many years in the immense mobile telecommunications market. It was not enough.
Thursday October 19, the Finnish equipment manufacturer Nokia announced a massive restructuring plan which will result in the elimination of nearly 14,000 jobs by 2026. Its sales collapsed by 20% in the third quarter and its profit followed the same slope. Its Swedish rival had announced, a week earlier, a 10% plunge in its sales and a massive depreciation of nearly 3 billion euros linked to the acquisition of a small American company, Vonage, obviously purchased twice too much. dear.
The two Nordics have one series of disappointments. In 2021, Nokia had already presented an initial plan affecting 10,000 people. This time, the same reasons are mentioned, the weak investments of telephone operators who are no longer rushing to increase the number of 5G antennas. They have already installed many of them and the technology has not brought them the additional sales they hoped for. Users have not noticed the difference and are not rushing to pay more for subscriptions.
5G does not pay
As a result, AT&T, Orange, Verizon and Vodafone are slowing down investments. Added to this are obviously inflation and interest rates, which are eating into the margins of equipment manufacturers at the other end, that of the supply of components.
5G does not pay, and 6G is not expected before 2030. Nokia and Ericsson are falling into the trough of the cycle, the curse of all equipment suppliers. But this dip could be deeper than expected given the evolution of technologies towards software and the very fierce competition with the Chinese in rapidly developing markets such as India or South-East Asia.
What adds to the melancholy of the old people in France, who remember the Alcatel saga, French champion voluntarily focused on what was to be the market of the century, which became world leader with the takeover of the American Lucent and which failed, bloodless , in 2016, in the arms of Nokia. There remain 4,000 people on three sites in France compared to 9,000 in 2013, and we do not see how they could escape the new restructuring. A story to ponder, at a time when we dream of repopulating France with brand new factories.