Telecom’s biggest vendors – 1Q24 edition

The goal of this report series is to equip telecom industry decision-makers with a comprehensive view of spending trends and vendor market power in their industry. To do this we assess technology vendors’ revenues in the telecom vertical, across a wide range of company types and technology segments. We call this market “telco network infrastructure”, or “Telco NI.” This study tracks 134 Telco NI vendors, providing revenue and market share estimates for the 1Q13-1Q24 period. Of these 134 vendors, 110 are actively selling to telcos; most others have been acquired by other companies in the database. For instance, ADVA is now part of Adtran, but both companies remain in the database because of historic sales.

Below are the key highlights of the report:

Revenues: Telco NI vendor revenues were $48.6B in 1Q24 and $208.3B for the annualized 1Q24 period overall, down 8.1% and 9.7% on a YoY basis, respectively. Excluding Huawei, the total market declined by 10.5% in the latest single quarter and by 10.7% in annualized 1Q24 on a YoY basis. After many disappointing quarters, Huawei appears to have turned a corner in the latest two quarters.

Top vendors: The top three Telco NI vendors remain the usual trio: Huawei, Ericsson, and Nokia. They account for 37.4% of the total market in annualized 1Q24, or 34.1% in 1Q24 alone. ZTE and China Comservice have been jostling for the 4th and 5th positions since early 2019.

Key vendors by YoY revenue growth: The top three vendors, in terms of YoY revenue growth, are common to both single quarter and annualized 1Q24: Tejas Networks, Broadcom, and Alphabet. Broadcom’s jump is due largely to the acquisition of VMWare, which closed in Nov 2023.

Spending outlook: Per our latest official forecast, we expect telco capex – the main driver of the Telco NI market – to dip from $315B in 2023 to between $295B-$305B. Capex will start to rise again in a couple of years, reaching $331B in 2028. The spending outlook for the US market is appealing in the short-term due to government funding (BEAD and RDOF).