LightCounting: 1H-2022 Wireless Infrastructure softness lingered in 3Q-2022

by Stéphane Téral, Chief Analyst at LightCounting Market Research

3Q22 was almost a carbon copy of 2Q22, which signals that the 5G-driven wireless infrastructure market is reaching its peak as the first wave of 5G rollouts wane.

Global uncertainties, lingering supply chain constraints, and forex headwinds contributed to another soft 3Q22 that followed an already sluggish 1H22. In the meantime, the wireless infrastructure market continued to operate at its equilibrium reached in 2021: the 2 opposite spheres of influence, the East led by China versus the West defined as the U.S. and its allies, are becoming more balanced.

We found that the West accounted for 50.5% of the global wireless infrastructure market while the East made up for the rest, with China accounting for more than 80% of the East.

“Overall, market dynamics continued to operate at equilibrium with the unabated execution of the 5G contracts awarded between 2H20 and 1H21. However, this also means that we are reaching the end of this first 5G wave, which confirms our view that the global wireless infrastructure market is peaking this year,” said Stéphane Téral, Chief Analyst at LightCounting Market Research.
As a result, the global wireless infrastructure market was down 1% sequentially and declined 8% YoY, sustained by 5G RAN, which was the only category that grew sequentially. 5G core ended flat sequentially but up 28% YoY, mainly driven by China. In addition, open RAN sales were weak again because Rakuten Mobile is ahead of its schedule and Dish’s 5G network construction did not offset the delays in the 1&1 network rollout in Germany.
After this year’s peak, our model points to a slow single-digit declining market. This bell-shaped pattern reflects the differences in regional and national agendas, including the COVID-19 impact as well as the impact of “the 2-year step function”—2 years (2019 and 2020) in a row of double-digit growth. The model considers all the 5G 3-year rollout plans we have gathered from many service providers and indicates strong activity through 2022 and 2023.
Historical data accounts for sales of the following vendors:
Vendor Segments Source of Information
Affirmed Networks (acquired by Microsoft, April 2020) vEPC, 5GC Estimates
Altran vRAN Estimates
Altiostar vRAN (CU, DU) Estimates
Amdocs 5GC Estimates
ASOCS vRAN (DU) None, supplies other RAN/vRAN vendors
Baicell RAN (RU) None, supplies other RAN/vRAN vendors
Benetel Open RAN (RU) None, supplies other RAN/vRAN vendors
Cisco EPC, vEPC, 5GC Survey data and estimates
China Information and Communication Technologies Group (CICT) RAN Estimates
Comba Telecom RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
CommScope (acquired Phluido vRAN patents, October 2020) vRAN (RU, DU) Estimates
Corning vRAN Estimates
Dell vRAN (DU) None, supplies other RAN/vRAN vendors
Enea 5GC Estimates
Ericsson RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Estimates
Fairwaves RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Fujitsu RAN Survey data and estimates
HPE 2G/3G core, 5GC Estimates
Huawei RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
JMA Wireless vRAN Estimates
KMW RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Kontron vRAN (DU) None, supplies other RAN/vRAN vendors
Mavenir (acquired ip.access, September 2020) vEPC, vRAN, 5GC Survey data and estimates
Metaswitch (acquired by Microsoft, May 2020) 5GC, vEPC and 2G/3G core Estimates
Movandi RAN/vRAN (RU/repeater) Estimates
MTI Mobile vRAN (RU) None, supplies other RAN/vRAN vendors
Node-H vRAN (small cells) Estimates
Nokia RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
NEC (including Blue Danube) RAN, vRAN (RU), EPC, 5GC Survey data and estimates
Oracle 5GC Estimates
Parallel Wireless vRAN (CU, DU) Estimates
Pivotal RAN/vRAN (RU/mmWave repeater) Estimates
Quanta Cloud Technology (QCT) vRAN (DU) None, supplies other RAN/vRAN vendors
Qucell RAN, vRAN Estimates
Ribbon Communications 2G/3G core Survey data and estimates
Samsung RAN, vRAN, vEPC, 5GC Estimates
Silicom Open RAN (DU) None, supplies other RAN/vRAN vendors
SuperMicro Computer vRAN (DU) None, supplies other RAN/vRAN vendors
Verana Networks RAN/vRAN (RU/mmWave) Estimates
ZTE RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates

References:

https://www.lightcounting.com/report/december-2022-wireless-infrastructure-3q22-177

LightCounting: Wireless Infrastructure Market to Grow at 5% in 2021; 8% in 2Q-2021

LightCounting says the 2nd quarter of 2021 was robust for the wireless infrastructure market, as a second quarter typically is, but below 2Q20 that was revved up by China’s 5G catch-up after a massive COVID-19 lockdown. The 5G rollout momentum seen in North America, and Northeast Asia reported in 2H-2020 and 1Q-2021 continued in 2Q-2021 and was augmented by strong activity in Europe, and 4G expansion in India.

As a result, the global wireless infrastructure market grew sequentially, driven by RAN, open vRAN—again mostly fueled by Rakuten Mobile’s 5G network buildout, and 5G and 4G core network elements.

“2Q21 was somewhat reminiscent of the golden GSM era and I could not find anyone malcontent as sales of all 4G and 5G network nodes performed magnificently. Regarding the vendors’ market shares, the gradual rise of Ericsson and Nokia was most immediately induced by the fall of Huawei.” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

LightCounting once again had to increase their North American forecast to reflect a strong start in C-band activity and Ericsson’s 5-year $8B 5G contract with Verizon and decrease their Asia Pacific’s 5G forecast due to uncertainties in China and India. As a result, the global wireless infrastructure market’s growth stayed intact at 5% over 2020.

In the long run, factoring in the strong North American 5G activity which is expected to last until 2025 our model’s market peak has moved by a year to 2023. Our service-provider 20-year wireless infrastructure footprint pattern analysis points to a 2020-2026 CAGR of 1% characterized by low single-digit growth through 2023, followed by a 1% decline in 2024, flatness in 2025, and a 4% drop in 2026. This lumpy pattern reflects the differences in regional and national agendas.

About the report:

2Q21 Wireless Infrastructure Market Size, Share, and Forecast report analyzes the wireless infrastructure market worldwide and covers 2G, 3G, 4G and 5G radio access network (RAN) and core network nodes. It presents historical data from 2016 to 2020, quarterly market size and vendor market shares, and a detailed market forecast through 2026 for 2G/3G/4G/5G RAN, including open vRAN, and core networks (EPC, vEPC, and 5GC), in over 10 product categories for each region (North America, Europe, Middle East Africa, Asia Pacific, Caribbean Latin America). The historical data accounts for the sales of more than 30 wireless infrastructure vendors, including vendors that shared confidential sales data with LightCounting. The market forecast is based on a model correlating wireless infrastructure vendor sales with 20 years of service provider network rollout pattern analysis and upgrade and expansion plans.

More information on the report is available at:

https://www.lightcounting.com/report/august-2021-wireless-infrastructure-2q21-116