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Difficult to contend Huawei Ericsson announced a write-downs of assets 1.8 billion

Date:Jan 17,2018
ASRON, the Swedish telecoms equipment maker, announced on Tuesday that it expects to write aside SEK 14.2 billion (about 1.77 billion U.S. dollars) in corporate assets, the Wall Street Journal reported on January 17 in Beijing.
 
Ericsson's costly transition efforts are continuing. In the face of a slowdown in revenue growth and more flexible competition from its Chinese rivals, Ericsson is struggling to reshape its business. The write-down is the latest in a series of spending by Ericsson over the past two years, totaling more than $ 5 billion.
 
Ericsson and its rival Nokia have long been among the world's leading providers of telecommunications equipment, but have been beaten by the rapidly rising Chinese rivals, especially Huawei Technologies. Even in the absence of significant progress in the U.S. market, Huawei is now the largest network equipment seller in the world. Network equipment is the core of modern mobile communication networks.
 
According to a report from market research firm IHS Markit, the size of the telecom equipment and software market is 126 billion U.S. dollars. Ericsson has dropped from number one to number three since 2012. Huawei ranked first with a market share of 20.4% in 2016; Nokia took the second place with Alcatel-Lucent being 14%; Ericsson with 12%; and the rapidly rising ZTE with 9.2%.
 
Ericsson has been in a loss for four consecutive quarters, it and Nokia have said that 2018 will be a challenging year. Mobile operators basically already have the equipment needed to build 4G networks and are expected to purchase the next generation of 5G network equipment as early as the beginning of 2019.
 
Earlier last year, Ericsson announced the launch of a massive transformation program to streamline management and focus on selling tower equipment and related hardware and software to operators such as Verizon Communications.
 
Ericsson also benefits from the failure of Huawei to make large-scale acquisitions into the lucrative U.S. market. The United States Congress released a report in 2012 that Huawei's telecommunications equipment may threaten national security. Huawei has denied the allegation. Ericsson said in December that the company has secured a 5G deal from Verizon.

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