According to research firm Dell’Oro Group, China’s Huawei commanded a slight lead over rivals Ericsson and Nokia in the first half of this year in terms of overall RAN (radio access network) revenue market share, a figure the firm said that accounts for sales of both macro cell site equipment and small cells. Dell’Oro said Huawei led the way with 30 percent share, followed by Ericsson with 28 percent and Nokia with 24 percent.
The firm also said that the overall global mobile Infrastructure market started 2016 in a slump with 4G down year-over-year in 1H16 and 3G experiencing waterfall declines.
“Many of the trends that characterized the market in the first quarter extended into the second quarter reflecting challenging market conditions in all regions for all major vendors, contradicting the idea that China alone is responsible for the slowdown,” said Stefan Pongratz, analyst at Dell’Oro Group, in a release. “The competitive dynamics and market conditions will likely remain extremely challenging for some time, as there are fewer 4G contracts on which to bid, and it will be at least three or four more years before there will be any meaningful 5G revenues.”
There is a bright side, however, Pongratz said. “On the upside, we expect demand to improve sequentially in the second half and did not make any material adjustments to the overall outlook for 2016 and continue to forecast the total RAN market to decline 8 percent in 2016 and 2 to 3 percent in 1H17.”
Dell’Oro said that combined, Huawei, Ericsson and Nokia accounted for more than 80 percent of the RAN market during the period.
Interestingly, Pongratz said that the breakdown in revenue share among the three vendors was slightly different for the non-residential small cell market in the second quarter. He said Huawei commanded the leading position, followed second by Nokia and then third by Ericsson (though he declined to provide specific market share figures).
“What I can share is that we estimate the top 3 RAN vendors accounted for nearly 70% of the small cell market in 1H16 implying they have done a decent job defending their turf,” he told FierceWireless. “However their combined small cell shares are roughly 15 points lower than the share they hold for the total RAN market, suggesting new players and smaller macro vendors have had some but still limited success capitalizing on the ongoing shift from macro to small cells.”
Dell’Oro’s findings are notable considering both Nokia and Ericsson are undergoing major changes as competition in the space heats up and carriers slow their spending as LTE buildouts near completion. Vendors in general are hoping for a major boost in spending in the coming years as carriers work to deploy 5G network technology.
Indeed, Nokia just this month posted a second straight quarterly loss due to decreased carrier network investments worldwide as well as expenses related to the recent closure of its blockbuster acquisition of Alcatel-Lucent. And Ericsson last month ousted its CEO Hans Vestberg after reporting a 26 percent decline in its second-quarter net sales and plans for another round of job cuts.
- see this release