Huawei, ZTE expand share in global telecoms gear, but all eyes are on the second half amid trade tensions
- Chinese telecoms giants grow global share in first half on back of rising 5G network equipment orders
Huawei Technologies and ZTE Corp have expanded their market share in the global telecommunications equipment market in the first half of this year, despite increased scrutiny about the security of their products and rising tensions in the US-China trade war.
Shenzhen-based Huawei, the world’s largest telecoms gear supplier, saw its global share reach 28.1 per cent at the end of June, up from about 27 per cent at the end of December, according to a report on Thursday by California-based Dell’Oro Group. Founded in 1995, Dell’Oro is a leading independent market research firm for the telecoms industry.
ZTE, the crosstown rival of Huawei, seized a 9.6 per cent share in the same period, compared with 8 per cent at the end of last year.
With peak data rates up to 100 times faster than what current 4G networks provide, 5G has been held out as “the connective tissue” for the Internet of Things, autonomous cars, smart cities and other new mobile applications, establishing the backbone for the industrial internet.
More telecoms network operators have started tests and deployment of the next-generation mobile technology, according to separate financial results recently posted by privately held Huawei and Hong Kong-listed ZTE.
“Although Huawei was placed on the US Entity List in May, restricting its purchase of US components without a licence, the company seems to have avoided any negative impact on sales of telecoms equipment,” said Dell’Oro analysts Jimmy Yu and Stefan Pongratz in a statement.
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On ZTE, Dell’Oro’s Yu and Pongratz said the company’s achievement of a 10 per cent market share in the first half of this year was “a great demonstration of the company’s customer loyalty”.
The company hogged global headlines a year ago, when the US government dropped the hammer on it for breaching the terms of an earlier deal on trade sanctions violations. It ceased major operating activities for nearly four months from April last year because it was barred from buying hardware, software and services from American hi-tech companies.
“Following the end of the US ban, ZTE’s revenue almost immediately returned to previous levels,” the analysts said.
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The latest tally of more than 25 5G network equipment supply contracts won by ZTE puts it ahead of Sweden’s Ericsson, which has reported 22 5G commercial contracts. Huawei remains ahead in the market with 50 announced 5G network deals, while Finland’s Nokia had 43 contracts.
Nokia and Ericsson’s global telecoms equipment market share in the first half stood at 15.7 per cent and 13.1 per cent, respectively, according to Dell’Oro. Those were down from 16.8 per cent for Nokia and 13.6 per cent for Ericsson at the end of December.
To be sure, Dell’Oro’s Yu and Pongratz said the first-half estimates may not reflect the full situation in the industry because some vendors, like Nokia, tend to ramp up their orders through the year.
Huawei and ZTE are also not expected to make any breakthroughs in the US. The Trump administration earlier this month announced a ban on US federal agencies buying equipment and services from Chinese companies, including Huawei and ZTE, citing national security concerns.
The global 5G infrastructure market is forecast to reach US$22.5 billion by 2025, up from US$1.3 billion last year, according to a report from US-based Zion Market Research in July.
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