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Published on : Nov 20, 2015

Telecom equipment manufacturers across the world are preparing for a sharp decline in the market as the wireless infrastructure investment China undergoes a major slowdown.

Mobile carriers in China have started shifting their resources toward a lucrative subscriber base after a heavy expenditure on 4G technology. The market is likely to experience a sluggish demand till the onset of 5G technology in 2020. Market leader Ericsson and other prominent manufacturers are looking to expand their revenue sources.

The decline in the earnings of Ericsson for the quarter ended on Sep. 30th, 2015, which was announced in Oct. 2015, has raised concerns regarding an upcoming slowdown in the telecom investment in China.

The sales of telecom products dropped by 10% on an annual basis in Northeast Asia, including China. The declining investment in 4G infrastructure is considered as the biggest reason for this slowdown.

Ericsson downgraded its prediction for the development of the global market for telecom equipment in a meeting with investors in Stockholm, held on Nov. 10th, 2015. According to the new predictions by the company, the market is likely to expand at a rate of 2-4% annually till 2018. Previous to this, the firm has projected a growth rate of 3-5%.

In recent times, the telecom industry has witnessed a massive investment for the advancement of 4G technology by the leading carriers in China. The total capital expenditure on infrastructure by China Mobile, China Unicom, and China Telecommunications went beyond US$65.8 bn in this year.

The country boasts of being the largest 4G wireless market in the world in terms of the subscriber base, accounting to more than 300 mn individuals which is almost the half of the cumulative subscriber base across the globe.