The Growth of the Global Telecom Equipment Sector

Huawei continues to maintain its position as the largest telecom equipment vendor globally, despite a decline in spending by North American operators. Research firm Dell’Oro Group reports that the global telecom equipment sector has seen an increase in value during the first half of this year. Dell’Oro Group tracks spending in six telecom networking technology categories, including broadband access, microwave transport, optical transport, mobile core network (MCN), radio access network (RAN), and service provider router and switch. The combined spending in these categories defines the global telecom equipment sector.

According to Dell’Oro’s findings, the revenues generated by vendors in these equipment categories during the first half of 2023 were 2% higher than the same period in 2022. This growth comes despite the significant reduction in network operator investments within North America. The financial reports from Ericsson and Nokia confirm the decline in spending in this region.

The Dell’Oro team notes that the North America region, which had previously experienced a five-year expansion of approximately 50%, has now entered a negative phase in the first half of 2023. The decline was anticipated, but the contraction occurred slightly faster than expected. Challenging 5G comparisons and inventory corrections also contributed to this trend. In particular, spending on North American broadband access equipment reached its lowest levels in nearly two years during the second quarter.

However, the decline in North America was offset by increased spending in other regions. Dell’Oro’s data demonstrates that worldwide telecom equipment revenues, excluding North America, increased by 7% in the first half of this year. This supports the belief that the telecom equipment market remains robust outside of the US.