ERIC has cast a dark shadow over the sector again.  ERIC is in a very tough position, it is losing market share, I would think that Nokia and specially Huawei and ZTE will pick it apart, piece by piece. Unfortunately, this affects NOK too.  The extent of which we will hear on July 27th when NOK announces its quarterly earnings.

Back to ERIC:  IMO, ERIC is in a very tough spot and frankly, its management is still behind the eight ball, it appears as that all credit ratings agencies will lower their debt to junk status, making the cost of borrowing more expensive.  Their product margins have collapsed, so competing on price is not a good alternative as it will push it further into losses.  No diversification whatsoever, makes them vulnerable.

A Wells Fargo analyst ventured an opinion, stating that ERIC's problems were not only their own but that they are losing market share to lower cost equipment competitors, suggesting that Huawei and ZTE are ERIC's problem.  

What I am taking out of ERIC's dire quarter (aside from all of the company specific stuff)is as follows:  the telecom companies are not spending as had been expected, and this will affect Nokia in the midterm.  Until Nokia says otherwise, this is my take.