The global telecoms equipment market slumped 4 percent year-on-year in the first quarter, falling short of forecasts for full-year growth of 1 percent in 2020, according to a report by market research firm Dell'Oro Group.
According to Dell'Oro Group, preliminary estimates show that the top five vendors in terms of revenue share in the global telecommunications equipment market in the first quarter of 2020 are Huawei (28%), Nokia (15%), Ericsson (14%), ZTE (11%) and Cisco (6%). As a comparison, these five vendors have a 2019 market revenue share of 29%, 16%, 14%, 10% and 7%, respectively.
Other highlights of the report include:
After two consecutive years of market growth in 2018 and 2019, the overall telecom equipment market is off to a weak start this year, reflecting mixed market conditions: positive market sentiment in mobile technology-related areas, including RAN and core networks, was not enough to offset declining demand for broadband access, routers and CE switches, and optical/microwave transmission equipment.
While a solid subscriber base and positive 5G momentum outweighed the downside risk of RAN and core network investments associated with the new crown epidemic, the epidemic had more of a real impact on some non-wireless related areas, leading to some supply chain disruptions and weakened demand due to increased macroeconomic uncertainty.
In the technology segment, mobile RAN and core network market revenues combined grew by single-digit percentages, with the two segments together accounting for nearly half of the overall telecom equipment market revenue in the first quarter of 2020.
Meanwhile, total revenue in the broadband access, microwave transmission, router and CE switch markets declined at a double-digit percentage point year-over-year rate during the quarter, collectively accounting for about one-third of overall market revenue.
Compared to previous recessions, the new crown epidemic is changing the way we use the internet. But changes in the way subscribers consume data do not necessarily translate into a corresponding increase in new infrastructure spending by operators to cope with traffic growth.
Some vendors and service providers say that network capacity upgrades need to accommodate the growth of data traffic, however, the surge in data traffic has not resulted in a huge demand for network capacity upgrades across all telecom equipment segments.
While the new crown epidemic continues to take a costly human and economic toll, Dell'oro's team of analysts collectively expect more favorable market conditions and reduced supply chain risk in the second half of 2020, driving the overall telecoms equipment market to grow 1% in 2020. This figure is a downward revision from Dell'oro's previous growth expectations of 2%.
