ZTE has been dominating revenue growth for telecom infrastructure sales and is poised for more expansion, according to a report from Frost & Sullivan.
The consultancy analyzed 2011 telecom network equipment sales and found that most network infrastructure equipment vendors, with the exception of China-based players, "seem to be either losing money or quitting the business."
The consultancy concluded that ZTE achieved the highest growth rate in revenue among all vendors, with a 33.4 percent increase in sales revenue year-over-year to $9.17 billion for the first 9 months in 2011, from $6.87 billion during the same period a year earlier. Average revenue growth for all vendors was approximately 10 percent in 2011 for the entire industry. Annual revenue increases broken down by vendor were: Cisco, 6 percent; Ericsson (NASDAQ:ERIC), 10 percent; Huawei, 14 percent; and ZTE and Nokia-Siemens, tied at 8 percent each.
The firm predicted robust future growth for ZTE, which has strong market positioning in China and is a network equipment supplier to the top 30 global telecom operators, excluding those in the U.S. market. "ZTE's fast growth in 2011 is contributable to its aggressive marketing and sales strategy both in China and overseas," said Frost & Sullivan. The firm noted ZTE has successfully expanded its business into more geographic regions and cooperated with Tier 1 players including Softbank (Japan), Bharti Airtel (India) and America Movil (Mexico).
In a separate report, Frost & Sullivan cited the need for extra wireless bandwidth to serve video applications on smartphones as the primary factor spurring growth in the global gigabit Ethernet test equipment market. "This trend is motivating carriers to change from synchronous technology over to Ethernet and is particularly visible in the mobile backhaul segment," said the firm.
Frost & Sullivan's analysis of the global gigabit Ethernet test equipment market revealed that the market earned revenues of $719.7 million in 2010 and is expected to reach nearly $1.1 billion million in 2015. The segments covered by the report include the 1 gigabit test equipment (1 GbE), 10 gigabit test equipment (10 GbE), and 40/100 gigabit test equipment markets (40/100 GbE).
"The year 2010 witnessed an unprecedented demand for Ethernet test equipment in the mobile backhaul space, with the large-scale investments made by wireline service providers finally paying off," said Prathima Bommakanti, Frost & Sullivan industry analyst. "The mobile backhaul application market has now moved into the growth stage of the product lifecycle, with demand for circuit speeds varying at the cell sites."
However, test equipment vendors are challenged by needing to maintain high R&D investments while keeping track of service providers' infrastructure upgrades and new service enablement. There is also considerable pricing pressure as buyers reduce unnecessary expenditures.
- see this Frost & Sullivan release
- see this other Frost & Sullivan release
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