A blog report from MTN Consulting has analysed the business performance of telecom vendors in the second quarter of 2019.
About 20 percent of telecom’s 100 or so key vendors have now reported second quarter 2019 results. From these early vendor results, there are modest signs of a ramp-up in 5G-related spending.
Preliminary totals indicate growth of +1.9 percent in vendor revenues to telecom operators during second quarter. Revenues for all vendors dropped in the first quarter, by 0.6 percent.
Ericsson is also by far the largest to report so far, accounting for over 50 percent of reported revenues.
The report tracked telecoms related revenue growth of companies such as Accton Technology (+42.4 percent), Sterlite Tech (+39.7 percent), EXFO (+23.8 percent), ADTRAN (+21.9 percent), Infosys (+19.7 percent), Broadcom (+17.3 percent), Nexans (+13.4 percent), Audiocodes (+12.5 percent), Tata Consultancy Services (+5.4 percent), SAP (+5 percent), Wipro (+4.1 percent), Accenture (+3 percent), Ericsson (+2.1 percent), Check Point (–1.4 percent), Net Insight (–1.7 percent), Oracle (–3.8 percent), IBM (–6.1 percent), Synnex (–14.4 percent) and TE Connectivity (–27.6 percent).
Ericsson’s telecoms sales grew 2.1 percent. Ericsson said it will face a negative margin impact from its push for strategic contracts in the Networks division.
Oracle and IBM dropped revenue in the telecom operator segment. Microsoft signed a large cloud deal with AT&T. AT&T also expanded an existing cloud partnership with IBM. Both Oracle and IBM have annual sales to telecoms in the $2-3 billion range.
Guidance from telecoms on expected spending levels (Capex and network Opex) was quite conservative for Q2 2019. The final growth rate for Q2 2019 vendor revenues in the telecom vertical will likely be below +2 percent.