Network service providers are keeping in the black while the equipment makers are struggling.
Swedish Telecom: winners-services, losers-makers.
Service providers TeliaSonera and Tele2, although slugging it out with one another for broadening throngs of broad band customers, both operators were sneaking up the ladder into black profit figures after the first quarter this year.
The companies making the cellular phones that are making them so much money, however, aren't sounding as gleeful. Ericsson reported over 30% off in net profits for 2010's first quarter, and placed much blame on mixed operator investment behavior when it came to investing in the new 4G. Both Tele2 and the Norwegian multinational telecom giant, Telenor, are expected to launch their own 4G services this year.
Undaunted about investing
Undaunted themselves about investing, Ericsson bought a majority stake in Korean firm LG and Nortel's joint venture company LG-Nortel for $242 million. The new firm, which last year had 1,300 workers and turned $650 million, will be one of South Korea's largest, and the deal will strengthen Ericsson's sales position there.
"We believe that now is the time to selectively increase our investments in bandwidth, both in our fixed and mobile networks. However, we made the decision in the first quarter to invest cautiously as we first wanted to get confirmation of growth," stated TeleSonera, who was first out in Sweden with 4G.
Tele2 reported a surprisingly hearty 91% rise in 1st quarter net since last Jan.-March, with a profit of $177 million, and experts interpreted the firm's success in the consumer postpaid segment as a sign of market recovery.