T-Mobile, AT&T rollouts send revenues up 39%

While its overall outlook for mobile infrastructure sales may be flat, Ericsson may have found a bright spot in North America, traditionally the region at the bottom of the vendor’s revenue chart.

In its earnings call today, Ericsson reported North American equipment and services sales grew 39% year over year in the first quarter to 4.3 billion Swedish Kroner (US $719 million) due primarily to wideband CDMA infrastructure sales and high-speed packet access (HSPA) network upgrades. In the US, the bulk of those revenues likely came from T-Mobile, which is building a nationwide 3G network for commercial launch this summer, and AT&T, which has wound up much of its own 3G rollout but is still adding markets and upgrading the existing 3G footprint with faster uplink software.

North America was the only region where revenues remained flat for Ericsson between the fourth and first quarters. Sales in its most important region, Western Europe, fell 24% quarter over quarter, and in other regions of the world, sales fell anywhere from 6% (in Asia Pacific) to 38% (in Latin America). North America hasn’t been good to everyone, though. Ericsson’s chief HSPA rival, Nokia Siemens Networks—which shares the T-Mobile contract with Ericsson—saw sales declines of 21% quarter over quarter, some of which can be attributed to the weakening value of the US dollar.

Ericsson CEO Carl-Henric Svanberg pointed toward more growth potential in the US to come, specifically citing the 700 MHz auction, which raised $19.6 billion in license sales. Verizon Wireless and AT&T both intend to use the spectrum for LTE networks. In addition, AT&T said it intends to use the spectrum for Evolved HSPA, a transition technology between 3G and 4G that adopts elements of LTE such as a flat IP network and multiple antennas while using the same W-CDMA scheme. Evolved HSPA is several years ahead of LTE in terms of development and as one of AT&T’s current HSPA vendor, Ericsson may have a leg up for the contract.

“$20 billion US dollars [were] paid for the right to use spectrum,” Svanberg said. “Of course they spent it because they intend to use it, so we should expect more to come.”