By Matt Walker
This brief provides a snapshot of preliminary 2022 results for the telco network infrastructure (Telco NI) market. It discusses demand and supply trends in Telco NI based on revenue reports and estimates for 105 active vendors, representing about 75% of the market. Telco NI’s giant, Huawei, has yet to report.
In the last few months, MTN Consulting has noted that network spending was starting to flatten in the telco segment. In 3Q22, telco capex dipped 5% YoY, the first decline since 4Q20. The vendor market also weakened in 3Q22, as Telco NI vendor revenues grew just 2% after seven straight quarters of much stronger growth. Now we have a solid set of preliminary results for 2022’s final three months, 4Q22. For the 105 vendors available, Telco NI revenues fell by 1% YoY in 4Q22; this is the first decline for this group of Telco NI vendors since 2Q20, when COVID shut down economies. For CY2022, Telco NI grew just 2% YoY, down from +9% in 2021, when telcos splurged post-COVID, and the 5G RAN market saw a nice run-up. Among the larger reporting vendors, the best 4Q22 Telco NI growth was recorded at the three cloud providers (AWS, Azure, and GCP); engineering services companies Dycom and MasTec; NEPs Calix, Ciena, Samsung, and Technicolor (now Vantiva). New vendor Rakuten Symphony recorded the best overall growth rate in 4Q22, with revenues of $180M up 193% YoY. On the other side, Cisco, Ericsson, and ZTE saw the worst declines in 4Q22, due in part to a downswing in spend among their largest customers.
For the overall market, some of the decline seen in 4Q22 was inevitable, as telcos slow down their initial 5G network buildouts. Other negatives include higher interest rates, higher energy costs, weak economic growth, cloud alternatives to network builds, and 5G’s inability to deliver services revenue growth. Revenue guidance for 2023 from key vendors suggests a flat to slightly down market, as telcos absorb capacity and continue to wrestle with these challenges. Capex guidance from telcos is consistent.
- Table Of Contents
- Figures and Tables
- Coverage
- Visuals
Table Of Contents
- Summary – page 2
- Telco NI vendor results for 4Q22 (prelim) – page 2
- For preliminary dataset, YoY revenue growth in 2022 was +2%, but -1% in 4Q – page 2
- Supply chain constraints easing – page 5
- Telco capex outlook – page 6
- Enhancements to our Telco NI coverage – page 7
- A note on the preliminary database – page 8
- Appendix – page 9
Figures and Tables
Figure 1: YoY growth in Telco NI vendor revenues (all companies vs. group of 105 reporting already)
Figure 2: YoY % change in Telco NI revenues in 4Q22 for select vendors*
Figure 3: YoY USD change in Telco NI revenues in 2022 for select vendors*
Figure 4: Corporate revenues per employee for key Telco NI vendors*
Figure 5: R&D expenses as % of revenues for key Telco NI vendors*
Coverage
Companies mentioned:
3M
A10 Networks
Accenture plc
Accton Technology
ADTRAN
ADVA Optical
Affirmed Networks
Airspan
Akamai
Alcatel-Lucent
Allied Telesis
Allot
Alphabet
Altran Technologies
Amazon
Amdocs
Amphenol
Anritsu
Arista Networks
ARRIS International
AsiaInfo
Atos Origin
Audiocodes
Avaya
Aviat Networks
Beijing Xinwei
Broadcom
BroadSoft
Brocade
CA Technologies
Calix
Capgemini
Casa Systems
Ceragon Networks
Check Point
China Comservice
Ciena
Cisco Systems
Citrix Systems
Clearfield
Comarch
Comba Telecom
CommScope
Commvault Systems
Comptel
Convergys
Coriant
Corning
CSG
Cyan
DASAN Zhone
Datang Telecom
Dell Technologies
DragonWave
DXC Technology
DyCom Industries
Dynatrace
ECI Telecom
Ericsson
EXFO
Extreme Networks
F5 Networks
Fiberhome
FireEye
Fortinet
Fujikura
Fujitsu Limited
Furukawa Electric
General Cable
Harmonic
HCL Technologies
Hengtong Optic
Hitachi
HPE
Huawei
Huber+suhner AG
IBM
Infinera
Infosys
Inseego
Intel
Italtel
ITOCHU Tech (CTC)
Juniper Networks
Kathrein
Kudelski
Kyndryl Holdings
Lenovo
MasTec
Mavenir
Metaswitch
Microsoft
Mitsubishi Electric
NEC Corp
Net Insight
Netcomm
NetScout Systems
Nexans
Nokia
Nutanix
Openet
OPTIVA
Oracle
Pace plc
Palo Alto Networks
Prysmian
Quantenna
Radcom
Radisys
Radware
Rakuten Group
Red Hat
Ribbon
Ruckus Wireless
Samsung Electronics
SAP SE
SeaChange
Sopra Steria
Spirent
Sterlite Tech
Subex
Sumitomo Electric
SYNNEX
TCS
TE Connectivity
Tech Mahindra
Technicolor
Tejas Networks
Transmode
Trigiant Group
Ubiquiti
Virtusa
VMware
Vubiquity
Westell
Wipro
Wiwynn
YOFC
ZTE
Visuals
