Nokia was least lacking in leading first-quarter growth across the global radio access network (RAN) market, though it remains behind larger rivals Huawei and Ericsson in overall market share, according to a new report from Dell’Oro Group.

Stefan Pongratz, VP at the analyst firm, noted Nokia “recorded the highest growth rate among the top five suppliers,” with its RAN revenue share outside of China now “trending upward over the past five quarters.”

Despite that growth, Nokia remains behind Huawei and Ericsson globally and behind Ericsson among RAN suppliers outside of China. Samsung earned the No. 5 position globally behind ZTE, but jumped a spot to No. 4 when taking China sales out of the equation.

That China delineation is due to the ongoing push by some Western governments in barring their telecom operators from purchasing RAN equipment from China-based vendors. Those efforts pushed Huawei down from the world’s largest RAN vendor to just No. 3 outside of its home country.

Dell’Oro Group also noted that Ericsson and Samsung lost market share during Q1, with the latter reversing its previous progress.

Broadly, Pongratz found the RAN market continued to show slower momentum, “spurring the overall RAN market to record a sixth consecutive quarter of more stable trends.” That stability was balanced between slower growth in established markets and more robust growth in emerging markets.

“Despite lackluster topline growth, the quarter was actually very interesting both from a regional and supplier perspective,” Pongratz wrote. “Not surprisingly, growth is now transitioning away from the advanced markets toward the slower-to-adopt 5G markets. But the speed of this shift was perhaps a bit surprising as the pendulum swung drastically toward the positive in India while the North American RAN market performed much worse than expected.

"And from a supplier perspective, vendor rankings were, for the most part, stable in the quarter. Vendor revenue shares, however, were impacted by the vastly different growth trajectories across the suppliers.”

That trajectory is being steered by slowing capex from some of the market’s largest operators that are coming off all-time highs tied to their initial 5G deployments. Despite those heavy initial investments, operators have so far failed to see a return on that capital.

MTN Consulting noted that telecom operator service revenues declined for most of 2022.

“It’s more important to focus on service revenues in assessing the health of the telco sector. That’s particularly important now, as telcos have spent heavily on their networks to deploy 5G,” the firm noted in a recent report, citing the strong surge in 2022 capex. “Telcos, and their investors, expect new revenue streams to result from these buildout costs. So far, 5G has not delivered.”

Nokia’s RAN market surge followed a robust quarter of news from the vendor.

Nokia posted a 10% year-over-year increase in total net sales for the first quarter and a more substantial 32% increase in net profits. That growth was just behind what Ericsson managed to post, but Nokia’s net income far surpassed the 46% year-over-year drop reported by its rival.

Nokia President and CEO Pekka Lundmark touted strong growth in 5G equipment sales across some markets, specifically pointing to India and “good traction in Europe.” Lundmark added that Nokia had around 30% market share across Europe at the end of the quarter, but was gaining half of all new contracts tied to operators ripping out equipment from China-based vendors like Huawei and ZTE.

Despite its momentum, Nokia’s management provided mixed messages on how the rest of the year is going to play out for the telecommunications infrastructure and software vendor.

Lundmark said the vendor was “starting to see signs of the economic environment impacting customer spend.” But, he added that customers still had a need to maintain their investments in 5G and fiber, with questions remaining over the timing of any spending impact.

“It’s clear that there is some economic uncertainty impacting customer spending plans,” Lundmark said. “In that regard, it is worth noting that if we look globally, excluding China, only about 20% of sites … are currently active for mid-band 5G, which should help illustrate how much investment still needs to be made. And even if we look at some markets like North America, which had invested earlier, mid-band site penetration is still only around 50%.”

The trepidation was echoed by Ericsson CEO Börje Ekholm, who told investors that the first quarter was “challenging” for the vendor due to “slower deployment pace in some early 5G markets,” which was further impacted by catching up on past supply chain bottlenecks. This impact is expected to continue through the next couple of quarters.

“This has, of course, been compounded with the fact that customers in those markets are lowering their inventories,” Ekholm explained. “So that’s the reason the impact on our sales is bigger than the slowdown in the underlying deployment phase. We will continue to see inventory adjustments during Q2, but we expect less impact after that; there could be some smaller effect during Q3.”

Huawei put on a braver face, with company executives proffering that the worst was behind the vendor.

“The company has gone through some challenging times, and I think the perception is right now that our business has stabilized and we’re moving steadily forward,” Andy Purdy, chief security officer for Huawei U.S., told SDxCentral in an interview.

Purdy’s comments echoed that of Huawei’s top leadership, which has focused on the vendor’s ability to pivot operations to deal with its new reality.

“A challenging external environment and non-market factors continue to take a toll on Huawei’s operations,” Huawei’s Rotating Chairman Eric Xu noted in a statement tied to the vendor’s latest results. “In the midst of this storm, we have kept racing ahead, doing everything in our power to maintain business continuity and serve our customers.”

Xu’s statement followed his “New Year Message for 2023” comments where he focused on continued digital investments to counter ongoing 5G radio access network (RAN) and technology restrictions in many Western countries.

“In 2022, we successfully pulled ourselves out of crisis mode,” Xu wrote in kicking off the message. “U.S. restrictions are now our new normal, and we’re back to business as usual. It’s been all hands on deck for the past year with every single member of the Huawei team working hard to navigate challenges and improve the quality of our operations.”