Huawei was the dominate global equipment services provider to telecom operators last year, according to a new report by Dell’Oro Group. The report found that Huawei controlled more than 30 percent of the $43 billion global services market.
The China-based firm held a commanding lead in global sales over rivals Ericsson, Nokia, and Cisco. Combined, those four vendors controlled 86 percent of the market, according to Jimmy Yu, analyst at Dell’Oro. Yu added that the current market continues to be driven by 4G LTE equipment sales.
“5G is talked about a lot right now, with revenues in the future,” Yu said. “LTE still drives the bulk of mobile infrastructure hardware.”
Yu added that the market will reach an accumulated value of up to $250 billion over the next five years.
Huawei’s leadership position stems from its dominate position in the global hardware market. The “services” aspect of the Dell’Oro report is tied to revenues called “product-attached services,” Yu explained. “In many ways, Huawei’s network equipment services revenue is strong because of the company’s success in capturing hardware product market share.”
Huawei has also emphasized its services offering beyond product-attached to include managed services and consulting services, Yu said. Also, service providers located in the Asia-Pacific region have increased their spend on network equipment services.
Dell’Oro’s definition of network equipment services covers the service offerings and other network equipment sold to service providers. The network equipment they service is primarily broadband access, transport, routers, core hardware, and mobile radio access. Yu explained that software is a very small part of that total.
But, the firm views 5G as a potential driver for increased spending on software.
“We believe that network complexity will dramatically increase in the future as service providers strive to incorporate SDN/NFV and deliver new products related to IoT and 5G,” said Stefan Pongratz, a director at Dell’Oro.