Telecom Equipment Market Remains Strong in Q1

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Following three consecutive years of growth, the good times kept on rolling in the first quarter for telecom equipment makers as they saw a strong beginning to 2021, based on first quarter earnings calls, according to Stefan Pongratz, vice president at the Dell’Oro Group.

Preliminary estimates suggest equipment providers increased their first quarter revenues by 15 percent year-over-year in the broadband access, microwave and optical transport, mobile core and radio access network, service provider router and switch markets.

The top seven vendors, which comprise 80 percent of the market, remained stable, led by Huawei, according to Pongratz. Ericsson, which had trailed Nokia by 5 percent, caught up with OEM during the quarter to tie for second. ZTE maintained its position over Cisco for the fourth spot. And Samsung passed Ciena in the quarter for sixth place.

Aggregate gains in North America were driven by double-digit expansion in broadband access, RAN, and SP routers and switches, according to Dell’Oro Group. Q121 number comparisons to Q120 benefited from the supply chain problems caused by the pandemic in North America and Asia Pacific, both of which grew more than 15 percent year over year. 

“The shift from 4G to 5G continued to accelerate at a torrid pace, impacting not just RAN investments but is also spurring operators to upgrade their core and transport networks,” Pongratz said. “At a high level, the suppliers did not report any material impact from the ongoing supply chain shortages in the first quarter. At the same time, multiple vendors did indicate that the visibility going into the second half is more limited.”

Overall, the Dell’Oro analyst team is adjusting the aggregate forecast upward and now projects the total telecom equipment market to advance 5 percent to 10 percent in 2021, up from 3 percent to 5 percent in the last forecast.

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