ZTE shrugged off its first-half struggles to regain the No. 4 position in global radio access network (RAN) revenues for the third quarter of the year, according to Dell’Oro Group’s latest findings. The surge propelled the Chinese vendor past rival Samsung and snugged it up against larger competitors Huawei, Ericsson, and Nokia.
The Dell’Oro report found that ZTE’s RAN business gained five points in market share in Q3, which allowed it to reverse the overall market share position it lost to Samsung in the second quarter.
Stefan Pongratz, senior director at Delll’Oro, in an email said that ZTE’s shipment levels had returned to “pre-ban levels,” with a strong surge seen in its 4G LTE shipments during Q3. The Chinese vendor accounted for nearly 9 percent of the overall market during the latest quarter.
ZTE early last year was slapped with $900 million in fines by the U.S. government after it was found to have sold equipment to Iran and North Korea that used components from U.S. companies in violation of a long-standing trade ban. That initial agreement also included a seven-year suspended denial of export privileges, which could be activated if any aspect of the agreement was not met.
That provision was activated this past April after the U.S. found ZTE had lied about taking action against company officials that were tied to the initial violations. Shortly after the ban, ZTE said it had stopped all “major operating activities” in its Shenzhen, China, factory.
ZTE’s ban had previously hit the optical network market, which Dell’Oro reported had plunged in Q2.
Samsung lost its No. 4 RAN position after having posted a three-fold increase in revenue share across North America between the first half of 2017 and this year. Pongratz said that Samsung’s strong first half also accentuated the slight slowdown in Q3.
A report earlier this year from ABI Research had predicted that Samsung was one of the vendors set to benefit from the ongoing 5G deployment push. That push is expected to generate $26 billion in worldwide sales by 2023.
Overall, global RAN revenues increased year over year during the third quarter, which was the first such increase in three years. Dell’Oro noted that the increase was at a high single-digit rate and was the strongest amount of growth since 2014.
“The results in the quarter support the thesis we have communicated for some time that market conditions are improving,” Pongratz stated. “In addition to re-surging investments in the North America region propelled by operators investing in LTE and 5G ready networks, the Asia-Pacific region rebounded after multiple quarters of steep declines, reflecting improved momentum in China.”
Pongratz explained that the firm was not yet ready to provide specific numbers but that Huawei, Ericsson, and Nokia maintained their respective positions between Q2 and Q3 of this year. Among those three, Ericsson managed to close the gap sequentially against Huawei in terms of worldwide RAN market share.
Ericsson did maintain its leadership position in North America, though Nokia managed to close the gap. Pongratz said that Ericsson exited Q3 with a three to four point market share lead over Nokia.
“Nokia’s results were encouraging, bolstered by its North America business growing at a double-digit pace, delivering on the guidance Nokia has previously communicated suggesting the North America business would be backend loaded,” Pongratz explained. However, he added that Nokia’s growth was aided by 4G LTE projects and not from new 5G contract wins.
Huawei and ZTE continue to see challenges in North America, with the most recent hurdle tied to T-Mobile US’ pending acquisition of Sprint. Samsung has managed to take up some of that slack, scoring deals with AT&T, Verizon, and T-Mobile US.