BSNL, the former incumbent fixed line and mobile carrier in India, is finalizing a $4.5-4.7 billion deal with Ericsson and Nokia Siemens to deploy 45.5 million GSM lines. Ericsson’s share of this deal is about $2.82 billions. What is remarkable about this deal is that it represents about 10.8% of Ericsson’s total sales of $25.9 billions in 2006. Ericsson’s sales to the USA represented 8% of its total sales in 2006. We are talking about one company in India generating more sales than the entire USA.
As can be seen in the graph below, sales to emerging markets like China, India, Indoesia, Brazil etc is what is and will drive Ericsson’s telecom equipment business globally.
The equipment suppliers are already aware of the tectonic shift in the structure of global telecom business that is inexorably moving to emerging markets especially in Asia. It is time that consulting firms and equity analysts also smell the coffee…
Source: Ericsson Annual Report 2006