Huawei's telecom business is weathering the political turmoil in stride in both the U.S. and abroad, according to research by Dell'Oro Group.
In May, the U.S. added Huawei to its Bureau of Industry and Security Entity List, which barred Huawei from doing business with American companies.
With the ban set to expire earlier this month, the Trump administration extended the length of the license that allows Huawei to do business with its U.S. customers. Citing the need for smaller telcos to find alternative vendors to Huawei, the U.S. Department of Commerce granted a 90-day extension that allows Huawei to continue doing some business in the U.S. until Nov. 19.
While the U.S. ban has cut into Huawei's smartphone business due to the lack of U.S. made components, the telecom business is still thriving.
In the first quarter of this year, Huawei had the highest share of the telecom equipment market at 28%, according to Dell'Oro Group. In the most recent second quarter, Huawei's market share improved to 29%.
Nokia was second with a 16 % share in the first of half of 2019 due to a strong showing across all seven categories that Dell'Oro Group tracks. Nokia finished in the top four of each product category, which was comprised of mobile radio access network (RAN), optical transport, routers, switches, mobile backhaul, microwave transmission and wireless packet core.
With the bulk of its telecom equipment market revenue coming from mobile infrastructure, Ericsson was third for the first of half of this year with a 13% market share. ZTE bounced back from its own U.S. ban last year to come in fourth at 10%
Over the past four quarters— from Q3 of 2018 through Q2 in 2019—the top seven equipment manufacturers by revenue share were Huawei, Nokia, Ericsson, ZTE, Cisco, Ciena, and Samsung. Combined these seven companies accounted for about 80% of the worldwide telecom equipment market revenue, according to Dell'Oro.
Overall, the worldwide telecom equipment market grew 6% year over year with the majority of the growth coming from mobile RAN and optical transport sales. Over the past 12 months, mobile RAN sales increased by 10% while optical transport was up 8%.
From a longer viewpoint, the telecom equipment market embarked on a growth phase starting in the third quarter of 2018 after three years of decline. As a result, the market’s growth for the trailing four-quarter period ending in the second quarter of this year was up significantly from a bottom reached in 2017. Most of the leading vendors gained revenue during this period with the highest percentage increases garnered by Samsung, ZTE, and Ciena, according to Dell'Oro Group.