The telecom equipment market grew by 15% during the first quarter of 2021 thanks to improving economic conditions and aggressive rollouts of 5G by operators, according to research from Dell’Oro Group.
Sales during the same quarter last year were affected by supply chain issues and lockdown restrictions due to the early stage of the Coronavirus pandemic, but analysts say there is genuine momentum in the market.
The rollout of 5G networks is not only seeing significant demand for Radio Access Network (RAN) gear, but also core and transport technologies. Unlike previous generational shifts, 5G networks require operators to completely rearchitect their networks in order to support the capacity and ultra-low latency required by the most revolutionary of new applications.
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Overall, Dell’Oro considers the market to be in rude health and has increased its growth forecast from 3-5% to 5-10% for 2021.
The top seven vendors still control four fifths of the market. Huawei’s market share excluding North America is now 36% - nearly the same combined share of the next three biggest competitors - Nokia, Ericsson and ZTE.
However, Ericsson has narrowed the gap on Nokia from 5 percentage points in 2015 to almost nothing. Meanwhile, Samsung has overtaken Ciena to become number six.
Moving forward, it remains to be seen what impact Huawei’s potential exclusion from the rollout of 5G in key markets will be, or what effect Open RAN will have on the major players.
Open RAN is a vendor-neutral approach with standardised designs that allow a variety of firms to supply hardware and software. Operators believe this can increase innovation, reduce costs, and reduce dependency on the ‘big three’ of Ericsson, Huawei and Nokia. Vodafone recently named Dell, NEC and Samsung among its first tranche of OpenRAN suppliers.
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