The overall telecoms equipment market appears to have gone from strength to strength in recent quarters, shrugging off the effects of the coronavirus pandemic and the global shortage of chips.

According to an assessment by Dell'Oro, the market – which groups together broadband access, microwave and optical transport, mobile core and radio access network (RAN), service provider router and switch – started 2021 on a high note, rising 15% year-on-year in the first quarter (Q1).

That compares to a 4% decline in Q1 2020, according to Dell'Oro's report from last year.

Figure 1: Still game: Despite the best efforts of the US, Huawei has managed to hang on to the top spot in Dell'Oro's equipment market rundown.
(Source: Huawei)

In a blog that summarized its findings, Stefan Pongratz, vice president at Dell'Oro with responsibility for the mobile RAN market and telecoms capex research, said the positive momentum that had characterized the overall telco market in much of 2020 has now extended into the first quarter, underpinned by double-digit growth in both wireless and wireline technologies.

Indeed, Dell'Oro reported in March that the market rose by 7% in 2020 as a whole, which it said represented the fastest pace of growth since 2011.

As a consequence of the recent positive developments, the analyst and research group has adjusted its forecast upward and now expects the total telecoms equipment market to expand by 5% to 10% in 2021, up from the previous forecast of 3% to 5%.

Figure 2:

Huawei in the lead

Pongratz also noted that China-based Huawei has retained its grip on the market, accounting for a 36% revenue share outside North America in Q1 2021. Pongratz said this was nearly the same as the combined share of Nokia, Ericsson and ZTE.

He also pointed to shifts in the vendor line-up: The gap between Nokia and Ericsson, which Pongratz said was around five percentage points in 2015, continued to shrink "and was essentially eliminated in the quarter." In addition, Samsung passed Ciena in the quarter to become the number six supplier. The top seven vendors still account for about 80% of the total market.

Among some of his observations, Pongratz said the shift from 4G to 5G has continued to accelerate "at a torrid pace, impacting not just RAN investments but is also spurring operators to upgrade their core and transport networks."

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Indeed, an April 2021 report from the Global Mobile suppliers Association (GSA) indicated that 435 operators in 133 countries or territories are investing in 5G. Of those, a total of 162 operators in 68 countries had launched one or more 3GPP-compliant 5G services.

Pongratz also noted that at a high level, the suppliers did not report any material impact from the ongoing supply chain shortages in the first quarter.

"At the same time, multiple vendors did indicate that the visibility going into the second half is more limited," he said.

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— Anne Morris, contributing editor, special to Light Reading