Releasing its Worldwide Telecom Equipment Market 2018 report, Dell’Oro has estimated Huawei accounts for 29% of the market, keeping itself on top of the pile. Ericsson, Nokia, ZTE, Cisco, Ciena and Samsung complete the top seven which accounts for 80% of the total. Encouragingly for all involved, the market grew by 1% year-on-year over 2018.
While the market was always expected to increase with the up-coming 5G euphoria, some investors might be a bit worried about the level of growth. These vendors have been consistently promising shareholders the arrival of 5G will compensate for the baron years, with the market declining year-on-year since 2015. 1% might growth in the market might not be the envisioned bonanza, but it is almost certain to accelerate over 2019.
Looking at the growth, Broadband Access, Optical Transport, Microwave, and Mobile RAN claimed the plaudits, while the remaining segments, Carrier IP Telephony, Wireless Packet Core, SP Router and Carrier Ethernet Switch, all declined across the period. The worldwide Mobile RAN market received particular praise.
This is a segment which proved more successful than some would have predicted. 4G networks have been given more attention across the period as demands for better experience have been growing from both a regulatory and consumer perspective, though the emergence of 5G NR continued to accelerate throughout the year. Interestingly enough, the period of rapid growth coincided with the intense scrutiny placed on Huawei, though this seems to have had little impact.
Through 2018 Huawei’s revenue share of the market continued to grow, taking it up to 29%, though Ericsson and Nokia were seemingly able to stem the flow of customers towards the door, halting year-on-year decreases across 2018. In the RAN market share rankings, Huawei is controlling the top spot, while Ericsson sits second and Nokia in third place. ZTE dropped 2% market share, though this is perhaps a sign of the business shut-down in the second quarter.
With the US government finding fewer and fewer sympathetic ears for its anti-China rhetoric in recent months, Huawei’s success has continued. Recently, Ryan Ding, CEO of Huawei’s carrier unit, claimed the firm had shipped 40,000 5G base stations to customers around the world. With many telcos considering these products as a ‘dumb’ component of the network, business may well continue as normal, unless of course any governments step in to implement national bans.
After years of trudging through stringent CAPEX, the light on the horizon does seem to be getting brighter. 1% growth is not going to compensate for the declines over the last couple of years, but it is a good indicator of the potential profits of tomorrow. Revenue growth in the embryonic days of 5G is certainly something to be pleased about.―Telecoms