Struggling Huawei loses ground in global telecoms equipment market, but remains sector’s top vendor on back of China demand

Nokia and Ericsson led telecoms equipment sales outside China in 2021, as Huawei struggled with US sanctions and barred from other major 5G markets
Global telecoms equipment sales last year reached nearly US$100 billion, up 7 per cent from 2020

Huawei

Che Panin Beijing

Published: 6:00pm, 15 Mar 2022

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Huawei Technologies Co lost some ground last year in the US$100 billion global telecommunications equipment market, according to a new report, but remained the industry’s top vendor on the back of strong demand from mainland China’s mobile network operators.

Shenzhen-based Huawei, which has been on the US trade blacklist since May 2019, still retained its lead in the global telecoms gear market with a revenue share of about 28 per cent, according to a report by research firm Dell’Oro Group, which did not provide a breakdown of 2021 sales.

The Chinese firm was followed by Finland’s Nokia and Sweden’s Ericsson, each of which had around 16 per cent revenue market share in the same period.

“Huawei continued to lead the global market, underscoring its grip on the Chinese market, depth of its telecoms portfolio and resiliency with existing footprints,” said analyst Stefan Pongratz, who is responsible for mobile radio access network (RAN) market and telecoms capital expenditure research programmes at Dell’Oro.

Huawei Technologies Co’s 5G base stations are seeing strong demand on the mainland, as major telecommunications carriers like China Mobile roll out their next-generation wireless network services. Photo: Shutterstock

Huawei and ZTE Corp are the main suppliers of 5G equipment, including base stations that are known as RAN, to three of the world’s largest wireless network operators, China Mobile, China Unicom and China Telecom. These three operators collectively lead the development of the world’s biggest 5G mobile network in China, which expects to have 2 million installed 5G base stations this year.

Dell’Oro analyst Pongratz, however, indicated that ongoing efforts by the US government to curb the deployment of Huawei’s telecoms network equipment outside China has had a negative impact on the company.

Last year, Ericsson and Nokia each had a 20 per cent revenue share of the telecoms equipment market outside China, according to the Dell’Oro report. By comparison, Huawei accounted for an 18 per cent share.

Global telecoms equipment sales last year reached nearly US$100 billion, up 7 per cent from 2020, the report said. China accounted for about a quarter of the total market.

Huawei to cut dividend payments to employees after expected revenue slump

The findings by Dell’Oro reflect Huawei’s continued struggle to stay afloat and remain relevant in the global market in the face of US trade sanctions and Washington’s pressure on its economic allies to bar use of the Chinese firm’s 5G equipment because of security concerns. The company has repeatedly denied US accusations of security issues.

Huawei said at the end of December that it expects a 28.9 per cent decline in total revenue for 2021 to 634 billion yuan (US$99.68 billion), following two years of US trade restrictions that have wreaked havoc on its once-lucrative smartphone business.

The company said that last year it saw solid growth in its enterprise business and stability at its carrier business. Its portfolio of telecoms equipment includes broadband access, microwave and optical transport systems, as well as mobile core network and RAN.

Huawei takes Sweden to court following 5G ban

Formerly China’s biggest smartphone vendor, Huawei has scrambled to adapt its operations to tighter restrictions imposed by Washington, covering access to advanced chips developed or produced using US technology, from anywhere.

Since late 2020, Huawei has pursued initiatives to diversify its operations. These include drawing up plans to co-develop a luxury electric sport-utility vehicle, selling refurbished smartphones and licensing its handset designs, expanding its cloud services operations in the Asia-Pacific region, helping domestic enterprises cut their carbon footprint, supplying more 5G base stations and core network gear to China’s major telecoms operators, establishing partnerships for its HarmonyOS mobile platform and divesting its Honor budget smartphone business.