Ericsson widened its lead over Nokia in the North American mobile infrastructure market during the first quarter, according to the analyst team at Dell'Oro Group. Dell'Oro senior director Stefan Pongratz said major drivers of growth in the U.S. market include Sprint's deployment of massive MIMO base stations in the 2.5 GHz spectrum bands, T-Mobile's 600 MHz deployments for both LTE and 5G, and AT&T's Band 14 base stations that will support FirstNet.
Sprint's spending was very strong late in 2017, but Pongratz noted a retrenchment in the first quarter. There are many possible explanations; one is that Sprint reduced spending when merger talks with T-Mobile started up again. This would suggest that Sprint's spending in the months ahead could remain somewhat depressed while the two companies try to convince regulators to bless their union.
Despite the uncertainty surrounding the proposed merger, Dell'Oro is increasing its near-term 5G RAN forecast by $50 million, a 50% increase. Pongratz said this reflects improved 5G momentum in the U.S. market.
Of course, China's Huawei remains the world's leading mobile equipment vendor but the company has been effectively shut out of the U.S. market by government fears that the company could enable espionage by the Chinese government.
Globally, strong demand for small cells and continuing investment in LTE are fueling the global mobile infrastructure market, according to Dell'Oro Group. Although the overall market declined during the first quarter, the drop was less than 5%, said Dell'Oro's Pongratz.
Huawei, Ericsson, and Nokia account for more than 80% of the global RAN market, Pongratz said. All three of those companies stand to grow their market shares even more as a result of the U.S. government's decision to ban American companies from doing business with ZTE. In the wake of that decision, ZTE has suspended the operation of its major business units, suggesting that the company could eventually stop shipping its radio equipment.
Ericsson gained ground on market leader Huawei, largely due to carrier spending trends. Year-on-year, European carrier spending on radio access network equipment was up for the third straight quarter, while Asian spending was down for the fourth straight quarter. North American RAN spending was down in the first quarter after increasing in the fourth quarter of 2017.
Small cells, which Dell'Oro says represented roughly 7% of the RAN market at the end of last year, appear to be the fastest growing part of the market. But so far, small cell revenue growth has not been enough to offset declining revenue from shipments of macro site radio equipment. Pongratz said global shipments of GSM, CDMA and WCDMA products are falling, while LTE shipments continue to increase.
“In contrast with previous technology shifts, investments in LTE have remained fairly elevated, even after the macro coverage peak," Pongratz said. "The depth of the technology roadmap, coupled with the increased use of video following the onset of ‘unlimited’ data plans, is stimulating operators to add RF carriers and capacity on both the macro and small cell layers."