The global wireless infrastructure market grew 7% in 2020, its fastest annual growth for a decade, according to market research group Dell’Oro.
Huawei maintained its leading position, with a 31% share of the market, an increase of 3%. Huawei grew despite the decisions by the US, and by the governments of several other countries (mostly in Europe), to force their local carriers to exclude the Chinese group.
The markets the analysis group monitors include mobile core and radio access networks (RAN); broadband access; microwave and optical transport; SP router and carrier Ethernet switching (CES).
According to Stefan Pongratz, VP and lead analyst at Dell’Oro for telecommunications infrastructure, rankings remained stable between 2019 and 2020, with the big 7 — Huawei, Nokia, Ericsson, ZTE, Cisco, Ciena and Samsung — accounting for between 80% to 85% of the whole market.
The total telecom equipment revenue is put at between $90 billion to $95 billion, with a roughly equal split between the wireless segments and fixed access; the latter group comprises optical transport, broadband access, routers and CE switching.
Pongratz added revenue shares continued to be impacted by the state of the 5G rollouts in highly concentrated markets.
“While both Ericsson and Nokia improved their RAN positions outside China, initial estimates suggest Huawei’s global telecom equipment market share, including China, improved by two to three percentage points for the full year 2020.”
Huawei’s 31% share remains more than double that of its Scandinavian rivals combined, with 15% market for both Ericsson and Nokia. The other main Chinese supplier, ZTE came in fourth with 10%, with Cisco, Ciena and Samsung bringing up the rear with 9% combined.
The analysts are optimistic about this year for telecoms gear, projecting the total global market will grow by between 3% to 5%.
Some other key takeaways from the report suggest strong growth in multiple wireless segments, including RAN and mobile core, with modest growth for broadband access and CES, and that Covid-19 related supply chain disruptions that impacted several segments in the early part of the year had largely been alleviated towards the end of 2020.
They also note that, not surprisingly, network traffic surges as a consequence of shifting usage patterns impacted the market in different ways, resulting in strong demand for capacity upgrades with some technologies /regions while the pandemic did lead to large incremental changes in others.
Investments in China have outpaced the overall market, with the researchers estimating that Huawei and ZTE are collectively gaining around 3 to 4 percentage points of revenue share between 2019 and 2020.
Meanwhile, Dell’Oro suggests Huawei’s revenue share of the market, excluding China, fell by 2% last year, coming in at some 20%, with both Nokia and Ericsson picking up market share. Ericsson solidified its ex-China market share lead to about 35%, up 2%, with Finnish rival Nokia gaining just 1 percentage point to finish the year with a 25% share of the market.
The Chinese group also lost its briefly-held top position in smartphone sales last year, partly as a consequence of US sanctions on key components.
Last week Dell’Oro estimated that optical transport gear revenues increased 1% in 2020 reaching $16 billion. It suggested that during this period, all regions grew with the exception of North America and Latin America.
“Between concerns on starting new optical builds during the start of the pandemic and aggressive plans on 5G deployments that required a larger share of a service provider’s capital budget, the spending on optical transport dramatically slowed by the end of 2020,” said Jimmy Yu, Vice President at Dell’Oro Group.
“It was a really dramatic drop in optical equipment purchases in the fourth quarter. While we anticipated a slowdown near the end of the year due to concerns around COVID-19, we were surprised by a 29 percent year-over-year decline in WDM purchases in North America as well as a 12 percent decline in China.
That said, there was good growth in the other parts of the world, especially Japan,” continued Yu.
As 5G emerges as a strategic technology, a host of 5G radio access network schemes have emerged in response to economic and national security issues raised by the former administration.
While the current administration has so far taken a less strident approach to U.S.-China relations, President Joe Biden has called for “extreme competition” with China in strategic areas such as 5G, AI and semiconductor technology.
Intellectual property concerns continue to dog Huawei and other Chinese vendors, along with allegations of back doors in network equipment. The U.S. is likely to maintain trade pressure to counter China’s predatory practices, observers predict.
“The United States should make transparency and accountability for predatory trade practices a central part of 5G policy,” states a 5G report released earlier this month by the Center for Strategic and International Studies (CSIS).
UK market tracker Finbond’s 5G analysis, meanwhile, notes that Huawei continues to spend heavily on 5G R&D, with particular emphasis on “exploring market needs and new opportunities.”
The analysis by the CSIS Working Group on Trust and Security in 5G Networks recommends increased U.S. federal spending to support 5G and 6G development, along with support for the transition to Open Radio Access Network and 6G architectures.
— George Leopold contributed to this article.