The latest research report from MTN Consulting indicated the market share of Huawei, Ericsson, Nokia ZTE, China Comservice and Cisco in the telecom network infrastructure market in 2020.
The size of the telecom network infrastructure market was $216.4 billion in 2020 from $217.7 billion in 2019. The telecom network infrastructure market declined 0.6 percent in 2020 despite telecoms started spending on building 5G networks.
Telecoms NI vendor revenues increased 4 percent to $61.2 billion on the back of a widespread pickup in 5G spending, driven by a year-long surge in China.
Huawei, Ericsson, Nokia ZTE, China Comservice and Cisco were the top equipment vendors in the global telecom network infrastructure market in 2020.
The biggest share gainers in 2020 were Ericsson, ZTE, Intel, NEC and Dell Technologies / VMWare. Samsung, Nokia, China Comservice and several fiber-centric suppliers lost the most share in 2020.
Capital expenditures by telcos ended 2020 at approximately $293.4 billion, down about 2 percent from the 2019 total. China was up, but a large number of telcos in the Americas and Europe reported capex declines. Telco opex, excluding depreciation and amortization, fell by 3.6 percent in 2020 to $1,173 billion.
For 4Q20, telco capex and opex (ex-D&A) increased 1 percent and 0.2 percent respectively. A number of carriers did front-load capex more than usual in 2020, including AT&T and Verizon, but the capex split by quarter was in line with historic periods.
Winners and losers
Ericsson gained 0.73 percent thanks to its strong presence in China from its 2019 base to extend its lead over third place Nokia. Huawei’s fortunes in 2020 were hampered significantly by supply chain sanctions and security concerns, giving both vendors an opening.
The biggest losers of 2020 were Samsung and Nokia, dropping 0.55 percent and 0.54 percent in market share respectively, relative to their 2019 positions. Samsung’s decline is due mainly to the completion of initial 5G builds in Korea. The company has a number of recent 5G wins elsewhere, however: KDDI and NTT DoCoMo (1Q21), as well as SaskTel and Videotron in Canada and a big deal at Verizon announced late last year.
Nokia’s move away from China impacted revenues, but it has also partnered with all the big cloud providers in 1Q21, and its support of open RAN differentiates it from Ericsson – these efforts should pay off for Nokia in the future.
ZTE’s share gain in telecom network market in 2020 was 0.54 percent. ZTE does not face the same supply chain bottlenecks as Huawei.
Intel grew share its by 0.45 percent in 2020. The company has faced some challenges recently around foundry production and the competitiveness of its leading edge chips, but in the telco space it is looking up: it launched a 3rd gen Xeon processor recently, optimized for 5G workloads; partnered with GCP on Anthos; and is working with Samsung on 5G SA core technology.
NEC’s share gained 0.41 percent in 2020, due to scaling up of Japanese 5G network deployments after COVID as well as NEC pushing harder on Europe (e.g. working with Telefonica on open RAN).
Dell Tech/VMWare gained 0.25 percent market share in 2020, as VMWare’s telco cloud positioning has been paying off. The company has been rising in share to the telco segment, from a rank of 49 in 4Q16 to break into the top 25 in 2020, ending the year at 21. That puts it on par with Fujitsu and Accenture, and slightly ahead of Ciena and Juniper.
Amdocs gained a bit of share in 2020, and remains a powerhouse in the IT service provider company segment, with $4.2 billion in 2020 revenues, well ahead of 2nd ranked (in this segment) IBM. Amdocs is diversifying revenue sources, integrating an important acquisition (Openet), and partnering with webscale providers (AWS, November 2020).
Prysmian, Corning, and FiberHome all lost share in 2020 due to telcos shifting away from new fiber deployments as capex focused on 5G construction. Fiber spending was especially weak early in 2020 as COVID-19 spread and companies struggled to cope.
CommScope’s single quarter share in 4Q19 (post ARRIS acquisition) was 3.21 percent of the global telco NI market, but this dropped to 2.82 percent in 4Q20. The company is heavily exposed to a small number of customers with its home networks division (CPE).
Telco Capex is likely to grow 4 percent in 2021. The software component of Capex will rise slightly to just under 20 percent, as software-based features and network automation solutions are more widely deployed.
The report said mobile operators’ 5G rollout plans will get back on track as more spectrum auctions complete and supply chains settle. Bandwidth growth will benefit transmission vendors. Fiber buildouts to cell sites and small cell spots will kick up again.