• Stronger performance in Q4 2024 helped offset revenue declines from H1 2024.
• A surge in North American sales during H2 2024 played a key role in stabilizing overall performance.
• Investment levels in India normalized after a 2023 peak, reflecting a slowdown in 5G rollouts.
• Vendors remain optimistic about 2025, anticipating market stabilization while exploring new monetization strategies.

Ericsson and Nokia, two of the world’s top five mobile network equipment vendors, reported a slight YoY decline in their respective 2024 revenues. After a weak H1 2024, the market rebounded in Q4 2024, driven by renewed network expansion investments from service providers, particularly in North America.

Ericsson reported a 5% YoY decline in annual revenue, reaching $23.5 billion. However, the North American market provided a bright spot, with revenue from the region jumping 24% YoY to reach $6.9 billion, driven by significant contract wins for mobile network expansion.

In contrast, the Southeast Asia, Oceania, and India markets saw a steep 39% decline, primarily due to a slowdown in network investments by Indian operators after a record-high spending year in 2023. Similarly, other key markets, including North-East Asia and the Middle East & Africa, experienced a 21% YoY and 12% YoY decline in 2024 revenues, respectively. Many operators, both early 5G adopters and those that had peaked their investments in 2023, scaled back spending as they shifted focus toward monetizing their existing 5G deployments.

Beyond mobile networks, Ericsson's Enterprise segment also faced headwinds in 2024. Sales from its Global Communications Platform (Vonage) declined, while Enterprise Wireless Solutions saw growth, supported by rising demand for private 5G networks.

Meanwhile, Nokia’s annual revenue declined 9% YoY in 2024 to reach $20.7 billion. Except for Europe, where strong growth in Nokia Technologies helped offset declines, all other regions saw revenue drops. India experienced the sharpest decline, with revenue halving to $1.49 billion, as operators scaled back mobile network-related capital expenditures following a record-breaking 2023.

Towards the end of 2024, North America sales rebounded, fuelled by strong growth in IP Networks within Network Infrastructure, alongside growth in both Mobile Networks and Cloud & Network Services. This late-year momentum helped limit the overall YoY revenue decline for the North American market to about 6%.

For Nokia, revenues from Network Infrastructure and Cloud & Network Services declined by 6% YoY, as demand remained sluggish in H1 2024 before picking up in H2 2024. Within the Network Infrastructure business, IP Networks and Fixed Networks drove growth in H2 2024, particularly in the Americas and Asia Pacific markets, supported by increased demand from enterprise customers and rising investments in Fixed Wireless Access (FWA) CPEs.

Meanwhile, Nokia saw much-needed demand for its Mobile Networks segment in Q4 2024, with strong contributions from the Americas, Europe, and the Middle East & Africa. However, the APAC region – including Greater China and India – continued to underperform, weighing on overall growth.

Key Takeaways –

1. Beyond the stabilizing hardware sales for networks (expected to remain steady in 2025, supported by planned network upgrades from major MNOs) both Ericsson and Nokia are shifting focus toward advanced software solutions aimed at enhancing CSP capabilities and unlocking new revenue streams. These solutions are largely centered around improving network automation, optimizing energy efficiency, reducing operational expenses, and enabling more customized service offerings through AI-driven network management and analytics. Ericsson and Nokia have already taken strides in this area, with Ericsson's Intelligent Automation Platform and Nokia’s AVA AI Operations gaining traction among operators seeking greater network efficiency. As CSPs push toward AI-driven, intent-based networking, both vendors are well-positioned to benefit from the increasing demand for software-centric solutions that go beyond hardware-driven revenues.
   
2. Upgrades to 5G Standalone (SA) remain sluggish, with only 20% of CSPs that have invested in 5G networks having activated their 5G SA cores, according to Counterpoint’s 5G Standalone Core Tracker. This slow transition presents a key growth opportunity for vendors, as 5G SA unlocks advanced capabilities such as network slicing, URSP, and AI-driven traffic management, all of which enable more efficient, scalable, and customizable services. Additionally, 5G SA enhances spectral efficiency, reduces latency, and improves overall network power consumption – critical factors as operators focus on reducing operational expenses and meeting sustainability goals.
   
3. Ericsson launched Aduna, an API-focused joint venture with leading telcos to drive new revenue opportunities for CSPs. Aduna enables service providers to monetize network intelligence through APIs, offering enhanced QoS for gaming, low-latency drone management, and advanced security for financial transactions. As 5G Advanced and network-as-a-service (NaaS) gain momentum, API-driven monetization is set to become a key growth area for the telecom industry.
   
4. Nokia has been realigning its strategy to focus on high-growth areas. In 2024, the company sold its submarine networks business to streamline operations while acquiring Infinera to strengthen its position in the growing optical networking market. The Finnish vendor is also expanding its private wireless business, which reached 850 customers in 2024, and capitalizing on the rising demand for fixed broadband networks, driven by fiber and FWA expansion.