Preliminary findings from the Dell’Oro Group’s research reveal that worldwide telecom equipment revenues have exhibited a mixed performance in the first half of 2023. While the overall market remained flat year-over-year in the second quarter, it saw a 2 percent increase in the first half of the year.
One notable trend was the decline in the North American telecom equipment market, which has experienced substantial growth over the past five years, expanding by approximately 50 percent, Dell’Oro Group’s Stefan Pongratz, who is responsible for the firm’s Mobile RAN market and Telecom Capex research programs, said in the report said.
However, in the first half of 2023, the North American market contracted faster than expected. Factors contributing to this decline include challenging 5G comparisons and inventory corrections affecting certain technology segments. Notably, North American Broadband Access equipment spending reached its lowest point in nearly two years during the second quarter.
In contrast, other regions around the world demonstrated a more stable performance. EMEA (Europe, the Middle East, and Africa), CALA (Central America and Latin America), and China maintained stable growth, while the Asia Pacific region outside of China experienced robust growth. Excluding North America, worldwide telecom equipment revenues increased by 7 percent in the first half of the year, highlighting the resilience of the global telecom equipment market.
From a technological standpoint, Radio Access Network (RAN) equipment experienced a decline in the first half, while the remaining five telecom equipment programs advanced. Wireline-focused programs such as Service Provider Routers & Switches, Optical Transport, and Broadband Access collectively increased by approximately 7 percent in the first six months. This growth, along with positive trends in Mobile Core Networks and Microwave Transmission, offset the challenges faced by RAN equipment.
In terms of vendor dynamics, the market remained relatively stable between 2022 and the first half of 2023. Notable exceptions include Ciena surpassing Samsung and a widening gap between Nokia and Ericsson.
Huawei continues to lead the global telecom equipment market, despite ongoing restrictions by the US government. Huawei maintains its position as the number one supplier in five out of the six telecom segments tracked by Dell’Oro Group and dominates markets outside of North America, contributing to 35 percent to 40 percent of revenues in the first half of 2023.
Looking ahead, the analyst team expects worldwide telecom equipment revenues to remain flat in 2023. However, uncertainties such as currency fluctuations, economic conditions, and technology advancements could influence the market’s performance. Additionally, inventory adjustments and national subsidization efforts may impact assumptions for various regions in the coming months.
