Dell’Oro: #1 Huawei increased market share at the expense of Ericsson, Nokia and ZTE; Mobile CAPEX flat; 5G Market Forecasts

Top Telecom Equipment Vendors:

According to a new Dell’Oro Group report, the top seven telecom equipment makers as of 3Q 2018 are: Huawei, Nokia, Ericsson, Cisco, ZTE, Ciena, and Samsung.  Huawei has captured a 29 percent share of the global telecom equipment market, increasing its market share by 8 percentage points since 2013.   Huawei’s revenue share improved by two percentage points of market share annually in each of the past five years.  That’s despite huge challenges in the U.S., UK, Australia and some European telecom markets due to security and backdoor issues.

During the same time period, Ericsson’s and Nokia’s market share declined about one percentage point annually on average until 2018 when both vendor held their market share flat.  ZTE’s share, which had typically been at 10 percent, dropped two percentage points in 2018 due to the U.S. ban that caused the company to shut down portions of its business during the second quarter.

worldwide total telecom equipment market 2018 Dell'Oro Group

 

Additional key takeaways from the reporting period include:

  • Following three years of decline, the overall telecom equipment market grew 1 percent year-over-year in 2018. The positive turn in the year was due to higher demand for Broadband Access, Optical Transport, Microwave, and Mobile RAN.  The remaining equipment—Carrier IP Telephony, Wireless Packet Core, SP Router and Carrier Ethernet Switch—declined in the year.  The two largest equipment markets in the year were Mobile RAN and Optical Transport.
  • The worldwide Mobile RAN market surprised on the upside and performed better than expected in 2018. In addition to the strong focus on LTE and LTE-Advanced, the shift toward 5G NR (3GPP Release 15 New Radio – Non Stand Alone) continued to accelerate throughout the year.
  • The worldwide Optical Transport market continued to expand for a fourth consecutive year driven by strong sales of DWDM equipment in China and to large Internet content providers for data center interconnect (DCI).

According to TelecomLead.com estimates, Huawei generated revenue of around $38 billion from carrier business, $10 billion from enterprises and $52 billion from phones and other devices — in 2018.

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Mobile Operator CAPEX:

The latest GSMA report indicates that mobile operator CAPEX reached $161 billion in 2018 and is forecast to be $161 in 2019 and $160 billion in 2020.  5G related CAPEX will grow to $123 billion in 52 markets in 2020 from $81 billion in 19 markets in 2019 and $41 billion in two markets in 2018.

Mobile operators will invest around $480 billion worldwide between 2018 and 2020 in mobile CAPEX.  Their investment focus will be 3G, 4G, 5G roll outs; and network optimization; capabilities beyond core telco.

 

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5G Market:

5G is on track to account for 15 per cent of global mobile connections by 2025, as the number of 5G network launches and compatible devices ramps up this year, according to a new GSMA report. The 2019 global edition of the GSMA’s flagship Mobile Economy report series reveals that a further 16 major markets worldwide will switch on commercial 5G networks this year, following on from the first 5G launches in South Korea and the US in 2018. It is calculated that mobile operators worldwide are currently investing around $160 billion per year (CAPEX) on expanding and upgrading their networks, despite regulatory and competitive pressures.

“The arrival of 5G forms a major part of the world’s move towards an era of Intelligent Connectivity, which alongside developments in the Internet of Things, big data and artificial intelligence, is poised to be a key driver of economic growth over the coming years,” said Mats Granryd, Director General of the GSMA. “While 5G will transform businesses and provide an array of exciting new services, mobile technology is also helping to close the connectivity gap. We will connect more than a billion new people to the mobile internet over the next few years, spurring adoption of mobile-based tools and solutions in areas such as agriculture, education and healthcare, which will improve livelihoods of people around the world.”

The new GSMA report reveals that:

  • The number of 5G connections will reach 1.4 billion by 2025 – 15 per cent of the global total. By this point, 5G is forecast to account for around 30 per cent of connections in markets such as China and Europe, and around half of the total in the US;
  • 4G will continue to see strong growth over this period, accounting for almost 60 per cent of global connections by 2025 – up from 43 per cent last year;
  • The number of global IoT connections will triple to 25 billion by 2025, while global IoT revenue will quadruple to $1.1 trillion;
  • One billion new unique mobile subscribers2 have been added in the four years since 2013, bringing the total to 5.1 billion by the end of 2018, representing about two thirds of the global population;
  • More than 700 million new subscribers are forecast to be added over the next seven years, about a quarter of these coming from India alone;
  • An additional 1.4 billion people will start using the mobile internet over the next seven years, bringing the total number of mobile internet subscribers globally to 5 billion by 2025 (more than 60 per cent of the population).

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According to Telecomlead.comHuawei has signed 30 plus 5G commercial contracts. Huawei has delivered over 40,000 5G base stations for commercial use. Huawei has 50 plus 5G engagements with customers.   Nokia has 20 plus 5G contracts, and almost 100 5G engagements with customers.   Samsung shipped 36,000 5G base stations – mainly to operators in the US and Korea — in 2018.

According to Dave Bolen of Dell’Oro GroupCisco, Ericsson, Huawei, Nokia, and ZTE are the top-five wireless/ mobile packet core infrastructure vendors.   At MWC 2019 in Barcelona, each put on a spectacular show with massive stands demonstrating its end-to-end technology prowess empowering 5G use cases, all enabled with their respective cloud-native cores. Their stands were packed with customers and potential customers leading to thousands of meetings. Each vendor had its share of press releases with 5G deals around the globe that are too numerous to name here. Links to the happenings at MWC19 from each of the top-five vendors may be found at CiscoEricssonHuaweiNokia, and ZTE.

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References:

http://www.delloro.com/delloro-group/telecom-equipment-market-2018

https://www.telecomlead.com/telecom-equipment/top-telecom-network-cos-huawei-nokia-ericsson-cisco-zte-ciena-samsung-89409

http://www.delloro.com/dave-bolan/5g-mwc19-barcelona-observations-its-all-about-the-core

https://www.gsma.com/newsroom/press-release/new-gsma-study-5g-to-account-for-15-of-global-mobile-industry-by-2025/

https://www.gsma.com/r/mobileeconomy/

https://www.gsmaintelligence.com/research/?file=5a33fb6782bc75def8b6dc66af5da976&download

 

 

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