Factbox: Top players in ailing mobile network gear market

Mon Jul 19, 2010 9:45am EDT

(Reuters) - Nokia Siemens is paying $1.2 billion for most of Motorola's wireless network unit.

Here are the top players in the industry:

ERICSSON

The Swedish company is market leader with a 34 percent share in the March quarter. It has the fattest margins in the industry due to greater economies of scale, but the downturn finally caught up with it late in 2009, when it missed forecasts and would not say when things might improve.

Through the 2005 acquisition of UK-based fixed-line communications maker Marconi, Ericsson expanded onto its rivals' turf. Telecom operators are increasingly offering bundled services of broadband, fixed-line and mobile services to users, so Ericsson felt it had to broaden its reach.

NOKIA SIEMENS NETWORKS

The 50-50 venture of Nokia and Siemens started operations in April 2007 and has 20 percent of the market, but is focusing on improving profit and cash flow.

In April it posted a surprise underlying operating profit, helped by cost-cutting, and said in 2010 it aimed to grow faster than the market, which it sees flat in euro terms. It forecasts its 2010 operating profit margin to be at best 2 percent.

On November 3 it unveiled a program seeking to slash up to 5,800 jobs and to save over 1 billion euros.

HUAWEI

China's top telecoms gearmaker overtook Alcatel-Lucent and Nokia Siemens Networks last year to become second by market share, supported by aggressive pricing and state financial backing.

In January-March Huawei's market share was 20 percent. It will fall behind Nokia Siemens again after the Motorola deal.

The company is not publicly listed so less is known about its business and strategy. Concerns over Huawei's relationship to the Chinese state are one of the reasons the U.S. government derailed its plans to buy 3Com Corp with Bain Capital.

ALCATEL-LUCENT

The Franco-American group created in December 2006 had a 14 percent market share in the first quarter. It has been dogged by weakening demand, merger-related costs, political infighting and uncertainty over product integration.

The loss-making group replaced its chief executive and chairman in 2008. CEO Ben Verwaayen expects to report its first net profit during 2010. It expects the market to grow 0-5 percent in 2010.

In May it posted a much wider first-quarter net loss than expected and missed revenue forecasts, blaming a shortage of components.

Several analysts began to question whether the group would be able to dig its way out of a poor start to the year to meet its profit margin and cash flow targets for 2010.

ZTE

China's second-largest telecom equipment maker shares the same home town, Shenzhen in southern China, with larger rival Huawei. It also enjoys close ties to local government, which has helped it expand, first in developing markets in Africa and South America, but of late in Europe and North America.

It controls 4 percent of the market.

MOTOROLA

The U.S. company saw its market share shrink to just 3 percent in the March quarter. Motorola's stronghold is in North America.

NORTEL

The Canadian firm, once North America's biggest telecoms equipment maker, was the first major victim of the mobile telecom market downturn, filing for bankruptcy protection in January 2009. It sold off assets rather than restructuring.

CISCO

The U.S. group last October unveiled plans to buy advanced wireless equipment maker Starent Networks Corp for $2.9 billion to boost its product offerings.

The deal put Cisco increasingly in direct competition with top wireless gear makers. Starent makes equipment that connects providers' core networks to 3G and 4G radio access networks.

Source: Market share data from Dell'Oro research firm.

(Editing by Michael Shields)

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