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Ericsson Communications' NZ revenue surges on Huawei's forced retreat

Ericsson Communications' NZ revenue surges on Huawei's forced retreat

A mobile network reset is well under way beneath the covers of New Zealand's 5G rollout.

Credit: Supplied

Ericsson Communications reported a steep increase in New Zealand sales last month as telco infrastructure rival Huawei struggled on through national security concerns.

Ericsson reported revenue of $43 million in the year to 31 December 2021 up from $21.9 million in 2020 and $16 million in 2019.

Huawei's New Zealand sales are headed in the opposite direction, falling from $198.8 million in the year to 31 December 2019 to $111.3 million in 2020. Today it reported a further decline in 2021 to $79.6 million.

Ericsson had largely failed to win major mobile infrastructure rollout business in New Zealand against Nokia, Huawei and more recently Samsung. The breakthrough came last April when 2degrees selected the Stockholm-based firm to roll out 5G sites, first in Auckland and Wellington and from there to up to 700 sites.

Before that, Huawei had a strong relationship with challenger 2degrees, building its mobile networks and and even debt funding them.

Nokia has yet to report its 2021 numbers but made $177.5 million in the year to 31 December 2020, down from $185.9 million in 2019.

Samsung's operation in New Zealand contains many business lines, so its revenue from the supply of telco infrastructure is not clear.

Huawei has been operating under a cloud of security accusations in the 5G market in some western countries, but especially those in the Five Eyes security partnership: Australia, New Zealand, USA, Canada and the UK.

In August 2019, New Zealand security agency the Government Communications Security Bureau (GCSB) signed off on Vodafone NZ's plan to roll out 5G with Nokia.

That November, Spark withdrew its original application to the GCSB to roll out 5G services using Huawei radio access network (RAN) equipment.

Rajesh Singh, Spark’s general manager of value management, said the company had instead partnered Nokia, Samsung and Huawei on a roster of preferred RAN equipment suppliers.

Blocked from its major infrastructure market, Huawei NZ is now reconstructing its business around its other product lines.

Despite the decline in revenue, Huawei NZ reported a $1.9 million net profit in 2021 after a loss of $719,317 in 2020. Cost of sales, administration and selling and distribution expenses were all down.


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Tags NokiaVodafonesamsungHuaweiEricssonmobile networks2degrees5Gspark

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