Services Growth Outpaces Product Growth for Telecom Equipment Providers (CSCO, ERICY, JNPR, LU, NOK)

by: Inventing Money

Inventing Money submits: I had previously written on March 23, 2005 about the "old guard" telecom equipment providers making an increasingly large share of their profits by reorienting themselves into service based companies. The new "box suppliers" would be located in low cost producers like China.

The chart I have produced below shows the "old guard" companies trending even further in this direction, 15 months after my original post, with service revenue growth significantly outpacing product revenue growth.

Click on image to view larger version


- Total revs excludes "other operations"

- Nokia revenues only includes Network segment. NOK service revs estimates to be 38 %in Q1'06 from 30% in Q1'05

- CSCO revs exclude SFA

- Nortel and Alcatel excluded since respective company's financial does not contain separate service revenue break-out

- Nokia currently services 39 customers in 30 countries

- Ericsson currently manages 30 networks