The Correspondence life of Huang Haifeng

The global telecom equipment market is facing a slowdown after four years of moderate growth as 5G development encounters challenges, according to the latest data released by Dell'Oro Group.

Dell'Oro Group remains optimistic about the 5G and fiber markets, saying they still have room for growth. Dell'Oro Group still expects the global telecom equipment market to grow for the fifth consecutive year in 2022.

Dell'Oro Group noted that the global communications equipment market slowed from 7% revenue growth in 2021 to 3% in 2022. In addition to the challenges of 5G development, factors such as component shortage, strong US dollar, supplier exit from Russia, and slowing wireless business activities in Japan and India are major factors contributing to the slowing growth of the global communications equipment market.

Notably, in the second quarter of this year, the growth in global demand for broadband equipment was barely enough to offset slowing growth in segments such as RAN, optical transport and routers.

Regionally, the Asia-Pacific (APAC) market is facing more challenges, and Europe also saw a year-on-year decline in total telecom equipment revenue in the second quarter of this year, after two consecutive years of growth.

Global communications equipment supplier revenue share

In terms of vendors, the ranking of communication equipment suppliers remained stable in the first half of 2022, with the top 7 vendors occupying about 80% of the market share. In the first half of 2022, Huawei ranked first, Nokia second, Ericsson third, ZTE fourth, Cisco fifth, Ciena sixth and Samsung seventh.

China telecom equipment supplier revenue share

Dell'Oro Group also noted that in the first half of 2022, Huawei's market share in China reached 58 percent, ZTE's 32 percent, and other vendors accounted for 10 percent of the market. In overseas markets, Huawei's market share has fallen to negligible levels.

In addition, Dell'Oro Group believes that the recent telecom CAPex report shows that most mobile operators have not revised their capex guidance amid the strong dollar, which has led to a slowdown in 5G construction, which has become a new challenge for equipment.

According to the financial results of the top three equipment manufacturers in the first half of this year, Huawei's carrier business revenue was 142.7 billion yuan, up 4% year on year; Ericsson posted net sales of SEK 117.5 billion, up 12 percent from a year earlier, and net profit of SEK 7.6 billion, up 7 percent. Nokia posted sales of 11.2bn, up 8% from a year earlier, and net profit of 679m, up 11%, as mobile network revenues rose 5% from a year earlier.