Cisco gained the most among top 10 network vendors

The telecoms network infrastructure vendor revenues rose 7.8 percent to $232 billion in 2021. Cisco was the star among top telecom network makers.
Cisco at MWC 2018Telecom operators Capex grew 10 percent in 2021 to $325 billion, and Opex grew about 5 percent. Capex will be touching the $330 billion range for both 2022 and 2023, followed by a decline, according to a report from MTN Consulting.

5G RAN spending is a driver. In 2021, telecoms spent more on 5G core, services deployment, and cloud collaborations. Fiber access was strong in a number of geographies. Transport and IP infra spending is also looking up where 5G penetration is strong and traffic growth requires capacity increases, MTN Consulting said in its latest report.

Some incremental Capex was spent on rip and replace projects due to the ban on Huawei networks, but the bigger effect was less price competition without Huawei, causing some projects to grow.

Huawei (18.8 percent), Ericsson (11.2 percent), and Nokia (9.1 percent) are the top three vendors in 2021’s telecoms NI market.

Top 10 network vendors

#1 Huawei
#2 Ericsson
#3 Nokia
#4 China Comservice
#5 ZTE
#6 Cisco
#7 Intel
#8 CommScope
#9 NEC
#10 Amdocs

Cisco was the year’s big share winner; Huawei slides but remains #1

Cisco gained 0.64 percent share in a market worth $232.1 billion. Cisco was helped both by a telecoms shift in 5G spending towards core networks, and Huawei’s entity list troubles. The next biggest winner was Samsung, which increased share by 0.32 percent. This was due to a big win with Verizon and a growing telecoms interest in seeking RAN alternatives beyond Ericsson and Nokia.

ZTE increased share by 0.07 percent, a seemingly small figure but significant given the size of the market and ZTE’s large base period share. ZTE has escaped the US entity list to date, and picked up some unexpected 5G wins in 2021, but its growth is more broad-based due to optical, fixed broadband, and emerging market 4G business.

Nokia and Ericsson lost share in the telecoms NI market in 2021. Their RAN revenues benefited from Huawei’s troubles in 2020 but telecoms spending has since shifted towards product areas with more non-Huawei competition. Both vendors are attempting to diversify beyond the telecoms market, with Nokia so far having more success; its non-telecoms revenues grew 12 percent in 2021.

Huawei’s share of telecoms NI declined to 18.8 percent in 2021, down from a bit over 20 percent in each of the previous three years. The US Commerce Department’s entity list restrictions were issued in May 2019 but hit the hardest in late 2020 and 2021, after Huawei’s inventory stockpiles began running out.

M&As

Ericsson acquired Vonage

Ciena acquired AT&T’s Vyatta virtual routing & switching business

Cisco acquired Sedona Systems

Cisco purchased Acacia

NEC acquired 5G radio/software company Blue Danube

Adtran acquired ADVA

Sterlite acquired UK-based Clearcomm

Tejas sold 43 percent stake to Tata Sons

IBM spun off its managed infrastructure services business, as Kyndryl

Dell Technologies spun off its VMWare holdings

2022 outlook

Many of the key vendors in the telecoms NI market have optimistic projections for 2022. Cisco, Corning, Ciena and Juniper have all issued bullish revenue predictions for the next few quarters. A strong market in the US for fiber and related products (e.g. optical transmission) is one factor. Telecoms deployment of 5G cores, wireline broadband upgrades, and private wireless networks are other factors. Another factor for some vendors is the opportunity to win “Huawei displacement” business.