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Nokia, CommScope, Cisco, others raise equipment prices

Nokia, CommScope, Cisco, others raise equipment prices

  • Written by Mike Dano / Light Reading
  • 10th March 2022

Telecom network operators may soon need to fork out more cash for the same equipment. In fact, some already are.

That’s because vendors including Nokia, Cisco, CommScope, Ciena and Cambium are among the companies signaling that they are hiking prices for their telecom equipment due to supply-chain troubles, inflation and other factors.

“Following twenty years of average macro basestation price declines in the 5% to 10% range, we are now modeling RAN [radio access network] prices to increase, reflecting a wide range of factors,” Stefan Pongratz, an analyst at research and consulting firm Dell’Oro Group, wrote in response to questions from Light Reading. “In addition to the changing vendor landscape and regional aspects coming into play with China’s overall share expected to decline going forward, we have also assumed there will be some COGS [cost of goods sold] inflation due to supply-demand mismatches, though the ability for everyone to pass this on [to their customers] remains limited.”

A significant ‘rarity’

While some vendors have been cagey on the topic of price increases, others are more forthcoming.

“We are making good progress in our efforts to raise prices in order to offset the profitability impacts of inflation,” CommScope CFO Kyle Lorentzen said last month during the company’s quarterly conference call, according to a Seeking Alpha transcript. CommScope sells a variety of equipment for both wireless and wired networks. “Overall, customer discussions have been very constructive, and we are confident in being able to recover the inflationary cost impacts experienced today by the end of 2022.”

Investors are closely watching CommScope’s efforts. “We consider this significant because CommScope has historically had a hard time increasing price, particularly in its operator/service provider customer verticals,” the financial analysts at Raymond James wrote in a recent note to investors.

Cambium, which primarily sells equipment for fixed wireless services, has already implemented two rounds of price hikes, one in the third quarter of last year and another in the fourth quarter. “The full impact of both the price increases will be realized during the second half of 2022,” promised CFO Stephen Cumming during the company’s recent quarterly conference call, according to a Seeking Alpha transcript.

Cambium isn’t alone. “We’ve had a couple of rounds of price increases,” Cisco CFO Scott Herren confirmed during his company’s quarterly conference call last month, according to a transcript of the event.

Herren’s casual tone belies what is a very unusual development in the telecom industry.

To read the complete article, visit Light Reading.

 

Tags: 5G Applications Companies Coverage/Interference Critical Infrastructure Enterprise Federal Government/Military Funding Long Term Evolution (LTE) News Public Safety Software State & Local Government System Installation System Operation Tower & Site Tracking, Monitoring & Control Wireless Networks Partner content

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