Market research firm Dell'Oro Group has just released its report on the overall global telecom equipment market for the fourth quarter of 2021. The report covers the entire telecommunications equipment market, including broadband access, microwave and optical transport, mobile core networks (MCNs) and radio access networks (RAN), SP routers and switches. The report data shows that although the year-on-year growth in total market revenue slowed to 2% in the fourth quarter of last year, this was not enough to disrupt the full-year trend.
Preliminary estimates suggest that the global overall telecom equipment market grew by 7% in 2021, the fourth consecutive year of growth, mainly due to soaring wireless revenues and healthy demand for wired-related devices stimulated by double-digit percentage growth in the RAN and broadband access segments. The global telecom equipment market total revenue approached $100 billion in 2021, up more than 20% since 2017.
In addition to challenging (before-and-after) comparisons, Dell'Oro Group attributed the weakness in the fourth quarter to external factors, including COVID-19 constraints and supply chain disruptions.
The analysis in these reports shows that the overall global share of leading suppliers remains relatively stable between 2020 and 2021, with top 7 suppliers accounting for about 80% of the overall market.
The U.S. government's ongoing efforts to curb the use of Huawei equipment are affecting the company's market position outside of China. Even so, Huawei maintains a leading position in the global market, underscoring its grip on the Chinese market, the depth of its telecom portfolio, and the company's resilience to its existing business.
Preliminary data show that the competitive environment outside China is more balanced, with Ericsson and Nokia's share essentially flat (20%), while Huawei accounts for about 18% of the market.
Dell'Oro Group has revised its relative growth rate for 2022 to reflect new supply chain and capex data. Nonetheless, the growth of the global telecom equipment market is expected to slow to 4% from 7% in 2022.
The risks are broadly balanced. In addition to the direct and indirect impact of the Russian-Ukrainian conflict and the broader impact across Europe and around the world, the telecommunications industry is still grappling with COVID-19 restrictions and supply chain disruptions. At the same time, wireless capital spending in the United States is expected to surge this year. (C114 Ace)