Huawei’s woes, fueled by tightening restrictions in many countries around the world, presents a $27 billion annual opportunity for networking equipment vendors that successfully displace the Chinese juggernaut, according to a new report from Rosenblatt Securities.

The opportunity is almost evenly split between radio access network (RAN) equipment and other components, including the wireless core, optical, broadband access, routers and switches, and other core IT products, according to the firm.

“We believe we are entering year one of a four-year cycle over 2021-2024 that could see global Huawei displacement sales grow from $5 billion to $17 billion,” Ryan Koontz, analyst at Rosenblatt Securities, wrote in the report.

Ericsson, Nokia, Samsung, Mavenir, and other unnamed vendors are poised to gain $8 billion in incremental RAN sales by 2024, he said, adding that Ericsson, Cisco, Nokia, and others also stand to benefit from about $1 billion in mobile core sales.

Ericsson, which has “the most competitive channels and products in Huawei markets,” could land up to 50% of the displacement opportunity on RAN sales, especially before open RAN vendors mature, according to Koontz. He pinned Nokia’s opportunity on displaced RAN sales at about 20%, and forecasts Samsung to “benefit significantly” starting in 2023.

On the optical front, the firm predicts Ciena, Nokia, Cisco, Infinera, and others to earn about $2 billion in incremental sales during the next four years. Nokia, Adtran, CommScope, and other companies are expected to generate $3 billion in broadband access sales. And finally, Cisco, Juniper Networks, and Nokia, are expected to benefit from $1 billion in routing sales, according to the firm’s projections.

While it estimates Huawei generated $27 billion in revenue for telecom networking equipment outside of China during its fiscal year 2019, the firm doesn’t expect Huawei to lose all of those contracts. There are three potential paths for Huawei to continue shipping legacy network infrastructure products, including a U.S. exception license for non-5G legacy products, a product redesign with components and technologies made outside of the U.S., and a trade deal between the U.S. and China that relieves export restrictions on Huawei.

Those prospects, none of which are a foregone conclusion, might minimize some of the pain inflicted on Huawei of late but it won’t completely erase long-term risks now associated with the vendors.

“Regardless of Huawei’s ability to procure global technologies, we believe global tier one carriers are also now looking beyond the short-term supply chain procurement risks to long-term procurement risks that open trade between the U.S., China, and potentially other global regions that could face future tensions and restrictions,” Koontz wrote.

He noted there’s a growing expectation among industry analysts and investors that “the previous open global trade model may bifurcate into two distinct supply chain zones, dominated by either the U.S. or China.”

Many operators outside of China and the U.S. are “scrambling to develop network plans without Huawei,” as evidenced by an urgent rise in requests for proposal activity, particularly among operators that currently count Huawei as their primary vendor, Koontz explained.

Any shift in vendors will be gradual because most operators that do business with Huawei have a massive installed base of the company’s equipment, he added.

Huawei sold about $150 billion in telecom networking equipment outside of China during the last decade, including roughly $100 billion in Europe, according to the firm. 

Koontz expects the most rapid displacement of Huawei to occur in the wireless core, routing and switching, and other core IT functions — three product areas where spending and the installed value of equipment is lower.