Mobile Network Infrastructure (Global Market)

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• Ethernet-APL (Advanced Physical Layer)
• Wireless Networking Equipment (WLAN) - Global Market

2023: World's largest base station manufacturers named

At the end of 2023, the Chinese company Huawei retained the title of the world's largest manufacturer of base stations. At the same time, the five leading players in the global market are increasing their total share. This is stated in the review of the analytical and consulting company Omdia, which was published at the end of May 2024.

In 2023, Huawei reportedly accounted for almost a third of the total revenue in the global base station market - 31.3%. Ericsson is in second place with 24.3%, while Nokia closes the top three with a result of 19.5%. Thus, together these three manufacturers control 75.1% of the industry. For comparison, in 2022 the result was 74.9%.

The top five suppliers also included ZTE and Samsung, whose shares amounted to 13.9% and 6.1%, respectively. Together, the five companies listed hold 95.1% of the world market in monetary terms against 94.6% in 2022. In the ranking, Omdia also mentioned NEC with a result of 1.5% and Fujitsu with 0.8%. All other manufacturers of base stations combined in 2023 received 2.7% of total revenue.

The report says that compared to 2022, Nokia, ZTE and NEC were able to strengthen their positions. Nokia benefited mainly from an increase in its share in India, and ZTE - from good demand in the domestic Chinese market, as well as in the emerging markets of Asia, Oceania, Europe, the Middle East and Africa. NEC products in 2023 were in demand in Japan and Europe.

The share of small market players outside the top five in 2023 was 7.1% excluding China and 5% including the PRC. However, these companies lost ground in relation to 2022, when the result was 7.3% and 5.4%, respectively. At the same time, it is noted that some base station suppliers are ready to sacrifice short-term profits to increase market share - by obtaining orders due to lower prices. Other manufacturers, by contrast, are betting on profits by sacrificing market share. The same company can use both strategies depending on the geography of supply, the project being implemented, the project or the time frame.

Omdia also estimates the contribution of 5G solutions to the total sales revenue of each supplier's base stations. Analysts emphasize that revenues in the 5G segment are an important indicator of the manufacturer's commercial success. It is emphasized that products originally deployed for 4G can often be upgraded to 5G using software if they support the same frequency bands.

In 2023, all suppliers of base stations increased revenue from the implementation of solutions with 5G support in relation to 2022. In addition, all manufacturers of 5G products provided more than 50% of sales in monetary terms. Fujitsu and NEC showed the highest result (over 90%), followed by ZTE and CICT Mobile. The lowest rates were recorded by Huawei, Ericsson and Nokia. This picture is explained primarily by the geographical orientation of the business. NEC and Fujitsu have benefited from their strong position in Japan's domestic market, while ZTE and CICT Mobile are actively supplying equipment to China, where 5G infrastructure is rapidly evolving. On the other hand, Huawei, Ericsson and Nokia are global suppliers with a more diversified customer base and revenue structure: equipment is shipped not only to developed, but also to emerging markets, where 5G networks are poorly represented or completely absent.^[1]

2021

Global 4G Infrastructure Market Valued at $54.33 Billion

On May 17, 2022, analysts at ResearchAndMarkets presented a report according to which the global infrastructure market for 4G networks for 2021 is estimated at $54.33 billion. According to experts, the costs of such decisions are growing and will remain on the rise in subsequent years.

The global 4G infrastructure equipment market is expected to reach $58.21 billion in 2022. In 2026, the market volume will reach $76.73 billion with a growth rate of 7.1%.

Global 4G Infrastructure Market Valued at $54.33 Billion

4G Infrastructure Equipment Market (Macros, Small Cells, Distributed Antenna Systems, etc.) Includes Equipment to Facilitate Human Telecommunications by Increasing Network Capacity and Accelerating Data Rate

A distributed antenna system (DAS) uses multiple antennas instead of a single antenna to provide wireless coverage of the same territory, while consuming less total power and improving reliability. Various available products include time-sharing (TD) LTE, frequency-division duplexing LTE, LTE A, which are used for logistics, e-commerce, virtual presence, crisis management, telemedicine, geoprocessing and other applications.

Asia Pacific was the largest region in the 4G infrastructure equipment market in 2021. Western Europe came second.

Global 4G Infrastructure Market Valued at $54.33 Billion

Significant growth of network traffic is one of the main factors in the growth of the 4G infrastructure equipment market. Network traffic is the amount of data that travels over the Internet at any given time. The exponential growth in the number of Internet users, accounting for almost 57% of the global population, combined with the increase in the number of smartphones and mobile devices (4.68 billion users) leads to an increase in network traffic. It is expected that by 2022 the number of Internet users in the world will reach 4.8 billion people, which, in turn, will also lead to an increase in network traffic.

According to statistics provided by Cisco Visual Networking Index (VNI), in 2021, global IP traffic reached 2.3 ZB The emergence of new social media platforms and applications such as augmented reality (AR) and virtual reality (VR) is also expected to contribute to the growth of network traffic in the future. To provide such huge network traffic and high network capacity, telecom operators will actively expand 4G infrastructure equipment, which is expected to drive the 4G infrastructure equipment market.

The high cost of deploying distributed antenna systems (DAS) is expected to hinder the growth of the 4G infrastructure equipment market. The number of Americans replacing landline phones with wireless phones is on the rise, according to the National Center for Health Statistics (NCHS), the statistics arm of the CDC. In 2019, only 42% of Americans had landlines, as most people switched from landlines to wireless cellphones.

This indicates growing reliance on cellular communications and demand for DAS as a solution for infrastructure-intensive cellular communications. However, the process of installing DAS is complicated and expensive. The DAS system requires investment of time, infrastructure and capital. The cost varies from $2 to $10 per sq. meter of coverage. For example, if the area of ​ ​ the building is 100 thousand square meters. meters, the installation of an active DAS will cost from $500 thousand to $1 million.^[2]

Equipment and software market for dedicated 4G and 5G networks valued at $1.7 billion

The global market for solutions designed to launch and operate dedicated LTE and 5G mobile networks reached $1.7 billion in 2021. This is evidenced by data from IDC analysts released in mid-March 2022.

Experts did not make a comparison with 2020, but said that infrastructure sales for dedicated networks are growing and will remain on the rise in the coming years. Thus, according to IDC forecasts, global spending on hardware and software for dedicated mobile networks will grow by an average of 35.7% annually and by 2026 will reach $8.3 billion.

According to IDC analysts, in 2021, revenue in the global infrastructure market for private wireless networks LTE/5G amounted to $1.7 billion

A dedicated LTE or 5G network is created within the same organization, it is isolated from public mobile networks. All its elements are in a closed loop. Such a network is intended exclusively for solving technological problems. It is a controlled and stable digital data environment. It is resistant to interference, has an increased level of protection, provides high quality communication in premises and territories, allows you to safely use data transmission, video monitoring and video surveillance, remote control, etc.

As explained in IDC, LTE/5G 's private wireless infrastructure means any 3GPP-based cellular network deployed to a corporate or industry client so that it gets dedicated access to private resources. These may include dedicated spectrum, dedicated hardware and software infrastructure for fixed wireless access, traditional and enhanced mobile broadband, IoT endpoints/sensors, and ultra-secure, low latency applications.

As reported in the IDC study, in 2021, the global infrastructure market for dedicated wireless networks LTE/5G continued to gain momentum. Experts note that most of the proceeds from the sale of infrastructure for such networks were still provided by private LTE networks, but private 5G networks were gradually introduced, which is facilitated by marketing, educational programs and pilot tests, as well as the launch of new 5G products and services. However, most projects in the field of private 5G networks are still being implemented in test mode or are at the stage of pre-commercial implementation, analysts say.

According to them, the further spread of private LTE networks and the beginning of real development of private 5G infrastructure in the field of production, warehouses and other industrial sectors show that although the sector of private 5G networks is in its infancy in terms of market size, the appetite and interest in what it can give is very real.

The equipment and software market for dedicated 4G and 5G networks for the year is estimated at $1.7 billion

The increased demand for dedicated or private wireless networks, which are capable of providing a high level of security, communication quality and reliability, comes to the fore as existing and emerging application scenarios, especially in the industrial sector, impose increasing demands on the network and peripheral infrastructure, said IDC senior analyst Patrick Filkins, whose words the company's press service leads in March 2022.

According to the expert, in the coming years, many organizations will invest in private 5G networks as technology develops, frequency spectrum expands and new devices enter the market.

Analysts note that LTE is being used as a technological base for the development of 5G. Often operators call their projects LTE/5G or LTE/5G-ready. This means that for networks operating according to the LTE standard, there is a technical ability to transfer them to 5G.^[3]

5G Network Infrastructure Market Leaders - Gartner

In February 2021, the analytical company Gartner published the so-called magic quadrant (study) for the infrastructure market for 5G networks. Ericsson, Nokia and Huawei are the largest manufacturers of relevant equipment and services in the world.

When distributing the positions of manufacturers of infrastructure solutions for 5G networks in the magic quadrant, Gartner experts proceeded from two criteria:

• completeness of vision;
• capability to execute.

Several factors were taken into account:

• ability to ensure competitiveness;
• IT provider infrastructure health and efficiency;
• positive impact on revenues;
• ability to retain users and reputation from Gartner's perspective.

Analysts attributed the positive aspects of Ericsson's solutions and products to the positive market reaction, the results achieved, the effectiveness of marketing measures, the quality of customer service and the financial condition of the company.

Among Ericsson's problems, analysts have included a narrow portfolio of radio equipment and a slow update of features compared to a number of competitors. In addition, some carriers noted that Ericsson sometimes lacks flexibility and a customer-centered culture, the study said.

The position of manufacturers of infrastructure solutions for 5G networks in the magic quadrant

By February 2021, 79 5G networks have been deployed on Ericsson equipment in 40 countries of the world, the company has commercial agreements in the field of 5G with 131 operators.

The advantages of Nokia, according to Gartner, are as follows:

• Nokia is one of the market leaders in terms of the number of contracts for the supply of solutions for 5G networks, which was achieved largely due to a comprehensive approach to the implementation of projects;
• Support for vRAN, cloud RAN, and Open RAN solutions
• Nokia is leading in the number of projects for the construction of dedicated LTE and 5G networks.

As for Nokia's shortcomings in the 5G infrastructure market, Gartner pointed to a delay in the development of ReefShark chipsets designed to reduce the size, cost and power consumption of carrier networks and meet the increased requirements of 5G technology for computing power and radio resources.

The report said that Nokia products tend to be inferior to technologies from other major manufacturers, since the initial choice of programmable gate arrays (FPGAs) was unprofitable and did not provide good performance. Although Nokia has selected several suppliers, such as Broadcom, Intel and Marvell, to address the issue, carriers should be careful about chip development, supply and integration.

The world's largest manufacturers of equipment and services for 5G are Ericsson, Nokia and Huawei

According to some telecom companies, Nokia 5G products and services are not as good as competitors, including in performance and performance. Nokia's product quality, software stability, bug fixes and compliance with the product development schedule need further improvement, experts say.

Nokia's market share declined when operators switched from 4G to 5G in key regions such as China and. USA This could lead to missed opportunities, including product improvements and increased business profitability from early 5G investments in leading markets.

Regarding Huawei, analysts noted the following negative points:

• deteriorating U.S.-China trade relations that will make it harder for Huawei to attract new contracts for 5G products;
• for the same reason, Huawei may face a shortage of components, although the Chinese company itself claims that it has stocked up on enough chips;

Huawei believes that separate equipment, including 5G base stations, has obvious performance and power advantages over Open RAN and vRAN. However, this strategy limits Huawei as a supplier in the implementation of Open RAN and vRAN strategic initiatives and projects.^[4]

2020

Operator spending on mobile network infrastructure estimated at $46.36 billion - Gartner

The volume of the global infrastructure market for mobile networks at the end of 2020 reached $46.36 billion, calculated in the research company Gartner (data released in August 2021).

Most of the costs (about $13.77 billion) came from the purchase of equipment and software for the development of 5G networks. In the 4G segment, the costs of telecom operators were measured at $17.13 billion, in the infrastructure category for 3G networks - $3.16 billion.

$6.59 billion was invested in the development of small cell technology for mobile networks. This amount does not include investments related to technology used in 5G networks.

Another item of infrastructure costs of telecommunications operator is the core network (Mobile Core; a key component of cellular networks of the standard, a centralized part of the network that provides and coordinates basic services). The costs here at the end of 2020 are estimated by experts at $5.71 billion.

Operator expenses on mobile network infrastructure at the end of 2020 are estimated at $46.36 billion

The COVID-19 coronavirus pandemic has sharply increased demand for optimized and ultra-fast broadband, used to work from home or for projects that require high bandwidth of networks such as video streaming, online games and social networks, said Gartner lead analyst Michael Porowski.

5G is the fastest growing segment in the mobile network infrastructure market, the study said. Investment in legacy generations of cellular networks is rapidly declining in all regions, and spending on non-5G small cells could fall as mobile operators move to the fifth-generation communication standard.

In 2020, infrastructure expenses of telecommunications companies in the field of 5G networks amounted to $2.9 billion. In Western Europe and China, indicators reached $794 million and $7.4 billion, respectively. In Western Europe, telecom operators have begun to prioritize spectrum licensing, upgrading the basic mobile infrastructure and managing regulatory processes, experts say.

Operators, in particular, invest in the creation of data warehouses and the development of communication channels. This investment will also be used to replace and maintain existing 4G and 3G infrastructure.

Global Mobile Network Infrastructure Market Volume Forecast

Demand from businesses and customers is a factor influencing the growing adoption of 5G commercial services. As companies return to office work, they will continue to upgrade networks or switch to the Internet using FTTH technology, as fast Internet has become an important part of remote work, says Porowski. - Users will also pay more and more attention to mobile communications both for office needs and for remote work.

The largest companies in the market that are actively involved in the development of 5G technology in North America are Qualcomm, Intel, Cisco and AT & T . Europe is known for developed high-tech wireless communication and related infrastructure. Therefore, there are huge opportunities in this region for the growth of the 5G infrastructure market.

Using the 5G network for the needs of home automation, public safety, monitoring and law enforcement, retail in Europe will increase the demand for 5G. The European Commission has created the Alliance for IoT Innovation. The goal of the Alliance is to promote the IoT market by introducing new technological advances in various industries.^[5]

The fall in the market of telecom equipment and services by 0.6%, to $216.4 billion, the rating of leaders

Global sales of equipment and services for telecommunications infrastructure in 2020 decreased by 0.6% - to $216.4 billion from $217.7 billion in 2019. This is evidenced by data from analysts at MTN Consulting.

The volume of the market in question has shrunk despite the fact that operators around the world have actively invested in the construction of 5G networks. At the same time, researchers say that the decline was surprisingly small, given the wide impact of the COVID-19 coronavirus pandemic on the economy.

According to experts, the unfavorable economic climate for the telecommunications industry softened the investments of telecom operators and the surge in demand for cloud solutions, as well as the work of telecom companies to find new sources of income and launch new generation mobile networks.

Sales of telecom equipment by Ericsson and other suppliers

According to MTN Consulting estimates, the capital expenditures of telecommunications operators in 2020 decreased by about 2% compared to 2019 and amounted to $293.4 billion. Capex has increased in China, while many operators in Europe, the Americas have reduced such investments.

Excluding depreciation and depreciation charges, operators' total operating expenses in 2020 fell 3.6% to $1.17 trillion. Much of this decline came from savings in sales and marketing and general and administrative expenses. Telecom operators cut such budgets as they adapted to the trend of remote work and accelerated the transfer of sales and support processes to digital platforms, analysts explained.

The study said companies remained among the world's top three manufacturers of telecommunications infrastructure solutions, and Huawei Ericsson. Nokia Next are China ZTE Comservice and. Cisco The largest increase in market share in 2020 occurred at ZTE,, and/, and Intel NEC Dell Technologies worst of VMWare all in this regard, China Samsung Nokia Comservice and several vendors focused on working with fiber.

Ericsson financials

Samsung's decline is largely due to the end of the construction of 5G networks in South Korea. At the same time, the company has recently concluded several similar contracts in other countries, including in Japan, the USA and Canada.

According to analysts, Ericsson's share in the global market for telecom infrastructure solutions in 2020 increased by 0.73 percentage points due to its strengthening presence in China. This allowed the Swedish company to get ahead of Nokia and take second place in the overall standings, pushing the Finnish company to third position. Huawei remained the leader, despite US sanctions that severely restrict the business of the Chinese vendor.

Financial performance of Ericsson and other telecom equipment suppliers

Nokia's share of the market in question in 2020 fell 0.54 percentage points largely due to the lack of projects in China. At the same time, the company has entered into partnership deals with all the largest cloud providers, and support for Open RAN technology, which distinguishes Nokia from Ericsson, should help the Finnish company in the future, experts say.

ZTE in 2020 was able to increase its market share in telecommunications network solutions by 0.54 percentage points. The company is also facing US pressure, however not as strong as Huawei.

The report cited Intel, which analysts said strengthened its position in the telecommunications sector with the launch of third-generation Xeon server processors, product optimization for 5G networks and work with Samsung on 5G SA Core technology.^[6]

Cellular Network Equipment Market Leaders

In mid-March 2021, it became known that in 2020 Huawei Technologies worsened its position in the markets for equipment for cellular networks outside China to Western competitors. The market share of Ericsson and Nokia has grown significantly, that is, the US campaign to contain the Chinese manufacturer has begun to bear fruit.

Huawei's share of mobile network equipment sales worldwide, excluding China, fell 2 percentage points to about 20% in 2020, according to analysts at Dell'Oro Group. Huawei was in third place behind rivals Ericsson AB and Nokia, which, according to analysts, significantly increased their market share. Ericsson strengthened its lead in the market outside China, where the company had a roughly 35% share, up 2 percentage points, while Nokia ended 2020 with a share of about 25%, which rose one percentage point.

At the end of 2020, Huawei lost its status as the world's largest smartphone manufacturer, dropping to 5th place under US pressure. In the end, the sanctions also affected the company's main business - the sale of equipment that is used in mobile networks. Huawei founder Ren Zhengfei noted that the company's revenue grew in 2020 despite difficulties, but it will have to leave some markets. With sales in China, Huawei remains the world's largest supplier of wireless equipment. China has eclipsed North America in 2020, becoming the industry's largest market, according to Dell'Oro. Now this market accounts for about a third of global sales.

In 2020, Ericsson and Nokia's share in the cellular network equipment market increased significantly

According to Jefferies analysts, Huawei accounted for half of orders for 5G equipment in China in 2020, with smaller Chinese rival ZTE taking 29%. Ericsson managed to take only 12%. The Chinese market provides Huawei with large and reliable customers, and some important foreign markets, primarily Germany, still actively use Huawei equipment.

Outside of China, however, Washington's policies are inexorably changing the balance of power in the market. Huawei's rise to the top of the telecom industry over the past decade has worried the U.S. government, which has decided the Huawei company could push major rivals Ericsson and Nokia out of the market. So great was the concern that then-Attorney General William Barr suggested Washington consider investing in Ericsson and Nokia.

Huawei loses status as world's largest smartphone maker in 2020

The administration later Trump announced Chinese government it was using Huawei as an intelligence and subversion service, though the company denied all allegations. Under U.S. pressure, many allies have banned or restricted the use of Huawei equipment in building next-generation 5G networks, citing national security requirements. The new Biden administration said it considers Huawei a security threat and will work with allies to protect its telecommunication networks.

Countries that have imposed or are considering such restrictions, including Australia, the United Kingdom and a number of other European countries, account for more than 60% of the global cellular equipment market. More than 25 European carriers have switched from Huawei to other suppliers in recent years. When Britain banned the use of Huawei equipment to build a 5G network, British company BT Group PLC signed a contract with Nokia, which will now become the largest supplier instead of Huawei.^[7]

Global sales of LTE/5G infrastructure to companies approached $1 billion

In mid-January 2021, the analytical company International Data Corporation () IDC published the results of a study of the global infrastructure market for dedicated (private) networks LTE and launched 5G at enterprises to solve business problems. According to experts, in 2019, the global revenue from the sales of relevant equipment amounted to $945 million.

Private LTE infrastructure is already used by selected verticals around the world to solve critical network problems. Nevertheless, the barrier to consumption remains high, limiting the implementation of solutions by organizations with internal competence and access to a dedicated spectrum, "said IDC senior analyst Patrick Filkins, specializing in IoT and mobile network infrastructure. - With the advent of more spectrum available for corporate use, concurrent with the advent of commercial 5G networks, interest in using private LTE/5G solutions has grown as the basis for connecting a host of critical industrial and traditional corporate organizations.

IDC analysts divide the infrastructure market for dedicated LTE/5G networks into three segments. The first segment includes critical networks, which require a permanent connection with redundancy and availability of a dedicated resource, as well as a clear need or desire to connect to mobile objects. Loss of communication in such networks can have serious negative consequences for business or operating activities.

Global sales of LTE/5G infrastructure to companies in 2020 approached $1 billion

The second segment of analytics is called industrial, it includes networks, the main task of which is to automate technical processes for Industry 4.0. This involves providing high-performance and ultra-reliable low-latency communication (5G URLLC) or via a time sensitive network (TSN).

The third segment includes networks close to the traditional concept of "business critical" technologies - they require reliable operation, but the need for redundancy and automation is lower. These include "business-critical" applications where loss of connectivity can result in loss of revenue.

In the report of the analytical company Worldwide Private LTE/5G Infrastructure Forecast, experts predict that global revenue from sales of infrastructure equipment for dedicated LTE/5G networks will increase from $945 million in 2019 to about $5.7 billion in 2024. These values ​ ​ correspond to an average annual growth of 43.4%. This includes aggregated costs for RAN, core and transportation infrastructure. The paper presents spending by region, an overview of the LTE/5G market, including growth drivers, and current challenges for technology providers, communications providers, and cloud service providers.

IDC experts predict that global revenue from sales of infrastructure equipment for dedicated LTE/5G networks will increase from $945 million in 2019 to approximately $5.7 billion in 2024

According to experts, the growing demand for digitalization and automation of production processes has formed the need for closed dedicated networks. By January 2021, we are talking about the LTE standard, but the use of 5G is also not far off.

By private infrastructure, IDC LTE/5G analysts mean any 3GPP-based LTE or 5G network deployed to a specific corporate or industrial customer and providing dedicated access. This includes networks that can use dedicated (licensed, unlicensed, or shared) spectrum, dedicated infrastructure, and devices with unique SIM identifiers. The private infrastructure LTE/5G transmits traffic to a specific organization without using resources accessed by any third-party organization.

The architecture of these networks is such that they are created within the same organization without connecting to public networks. At the same time, all elements of the ecosystem (from the network core and IT control centers to endpoints - all kinds of sensors and subscriber terminals) are in a single closed circuit. This is the main difference between private networks and ordinary public networks.^[8]

GSMA: CIS telecom operators invest $25 billion in infrastructure

According to the data released on November 11, 2020 by GSMA Intelligence, an organization specializing in research in the telecommunications industry, mobile operators in Russia and the CIS will invest more than $25 billion in the development of new infrastructure in 2020-2025. More than half (57%) of the costs will be for the development of 5G technology.

Providing 5G services will increase the capital intensity of operators while focusing the initial monetization strategy on expanded mobile broadband and other consumer applications, experts said.

GSMA: Russian and CIS operators invest $25 billion in infrastructure

Mobile operators continue to improve communications by expanding 4G networks and laying the foundation for 5G, which brings tangible benefits to economic growth and social development through stimulating commerce, communications and services in the CIS region, says John Justi, head of GSMA's regulatory division. - The COVID-19 pandemic has highlighted the importance of a sustainable and inclusive digital economy based on universal access to fast and reliable Internet and a wide range of digital services.

GSMA Intelligence expects that by 2025 Russia and the CIS will have about 52 million connections to 5G networks, or 13% of the total number of connections. The share of 4G among such connections will be 65% in the region.

According to GSMA estimates, by November 2020, the cost of building 5G networks within the Moscow Ring Road will cost one operator 37.2 billion rubles, while according to the standards adopted in most countries - 6.7 billion rubles (for the 3.4-3.8 GHz range). For the range of 4.8-4.99 GHz, the Russian operator construction will cost 54.4 billion rubles, according to foreign standards - 10.3 billion rubles.

According to the association, the penetration rate of mobile communications in the Russian Federation in 2019 was 89%, while 66% of Russians used smartphones.^[9]

2019

TrendForce Named Base Station Market Leaders

In early August 2020, the analytical company TrendForce released a study in which it spoke about the leaders in the global market of base stations for mobile networks.

The first place at the end of 2019 was taken by Ericsson, which accounted for almost a third (30%) of sales of such equipment. Next came Huawei, which recorded 27.5% of the market under consideration, and Nokia closed the leading three (24.5%). Thus, the base station market is essentially controlled by three vendors.

However, Samsung is gradually picking up on the leaders, which is largely facilitated by the company's cooperation with mobile operators in South Korea and the United States. Samsung's Korean partners include SKT, KT and LG Uplus, and American AT&T, Sprint and Verizon.

Base Station Market Leaders for 2019

In addition to Samsung, Huawei is strengthening its market position despite US sanctions. The Chinese company is helped by the rapid development of 5G infrastructure in China. In the first half of 2020, the "big three" Chinese operators - China Mobile, China Unicom and China Telecom - built more than 250 thousand base stations for fifth-generation networks in their country.

TrendForce Vice President of Research Kelly Hsieh in the report listed several factors that contribute to the growing penetration of 5G among base stations and the rise of the entire market:

• growth of mobile traffic volume;
• Increased number of tasks requiring low data latency (e.g., self-driving cars, smart manufacturing and remote surgery)
• development of major M2M projects (primarily in smart cities).

According to the analyst, the construction of base stations with 5G support will bring various benefits to operators, such as the stability of investments and the development of partnerships between telecom and other industries.^[10]

Market growth of 6.2% to $39.87 billion

The volume of the global cellular network infrastructure market in 2019 reached $39.87 billion, an increase of 6.2% compared to 2018. This is evidenced by the data released on July 28, 2020 by the analytical company Gartner.

Although there were no fifth-generation commercial networks (5G) then, operators actively invested in their construction and spent a total of $4.15 billion, which is 576.6% more than a year ago. Investments in 5G infrastructure accounted for a little more than 10% of the total equipment and other solutions required for mobile communications in the market at the end of 2019.

Spending Across Mobile Network Infrastructure Market Segments, Gartner Data

Investment in wireless network infrastructure continues to gain momentum as more operators make 5G projects a priority. They reuse their existing assets, including frequency bands, base stations, base and transport networks, and transfer LTE/4G costs to support mode, says Kosei Takiishi, senior research director at Gartner. - Early 5G users are driving intense competition among telecom operators. In addition, governments and regulators are promoting mobile networks and betting that they can become a catalyst and multiplier for extensive economic growth in many industries.

The competition itself, according to experts, leads to an acceleration in the pace of introduction of 5G networks. The new ecosystem built on the projects O-RAN (open radio access network, "open radio access network") and vRAN (virtualized RAN), "virtualized RAN network") is able to save subscribers from binding to a specific manufacturer and contribute to the spread of 5G technology by providing inexpensive and flexible 5G products in the future.

The OpenRAN concept enables the operator, if he has internal IT competencies or with an IT integrator, to include certain functionality in the solution and refine it on his own at the right time. Mobile networks are rapidly evolving at the service level. Very often it is necessary to make improvements to the core or key elements quickly. If the solution is provided by a large vendor, then this is quickly difficult and you have to wait for a new cycle. Under these conditions, OpenRAN allows you to quickly bring products to market, as well as reduce costs, experts say.

In 2019, the largest infrastructure costs of mobile operators in the world were associated with LTE networks: total spending on such solutions amounted to $20.69 billion, an increase of 1.2% compared to 2018.

Infrastructure sales for 3G networks on a global scale in 2019 decreased by 25.7% and amounted to almost $4.15 billion. The implementation of solutions for 2G networks fell even more - by 46.9%, to $797.4 million.

Cellular Infrastructure Market Up 6.2% in 2019

Global spending on Small Cell base stations in 2019 turned out to be more than $5.34 billion, which is 11.6% higher than a year ago. In the category of solutions for the core of the mobile network, annual costs were measured at $4.74 billion, rising 3.2% compared to 2018.

Gartner's analytical report also notes the active investment of Chinese operators in the infrastructure of 5G networks. It is expected that in 2020, about half of the costs of such decisions will fall on the Celestial Empire. Experts associate such leadership of the PRC with the relatively cheap production of telecom equipment in the country and a decrease in regulatory barriers that interfere with the development of 5G networks.^[11]

2018

The costs of equipment and software for mobile networks have been calculated. 5G share grows

In 2018, the global infrastructure market for cellular networks reached $37.53 billion. This is evidenced by the data of the analytical company Gartner. The study was published on August 22, 2019.

In their report, experts focused on 5G networks. Global spending on hardware and software used to build these networks was $612.9 million in 2018. It is expected that in 2019 investments will triple to $2.21 billion, and in 2020 - will double to $4.18 billion.

The costs of equipment and software for mobile networks have been calculated. 5G share grows

Most of the infrastructure costs (more than $20.45 billion) in 2018 fell on LTE networks. 3G network costs amounted to $5.58 billion.

As fifth-generation networks are deployed, not only infrastructure costs will grow, but also their market share. For example, in 2019, 5G solutions will account for 6% of cellular infrastructure costs, in 2020 the figure will reach 12%.

According to Sylvain Fabre, senior director of research at Gartner, operators use a non-autonomous infrastructure to deploy 5G networks, so they can launch services faster, since 5G New Radio (NR) equipment can be deployed based on the existing 4G LTE infrastructure.

In 2020, telecommunications companies should switch to autonomous technology, 5G which will require the presence of 5G NR equipment and a core network. 5G This migration will reduce operator costs and improve network performance for subscribers.

By August 2019, 7% of operators around the world had deployed 5G infrastructure in their networks. We are talking about countries such as the USA, South Korea, Switzerland, Finland and the United Kingdom.

So far, consumers are the main catalyst for the development of 5G networks, but in the future, operators will focus on the corporate sector. 5G networks are able to expand the mobile ecosystem by embracing new industries such as smart factories, self-driving cars, telemedicine, agriculture and retail. In addition, the technology will create private networks for industrial customers.

Worldwide Wireless Infrastructure Revenue Forecast, 2018-2021 (in millions of dollars)

Equipment manufacturers see private networks for industrial users as a market segment with huge potential.

It is too early to talk about the capabilities of private 5G networks, but manufacturers, regulators and standardization bodies are already preparing, - said Fabre.

For example, a Germany 3.7 GHz band is allocated for private networks, Japan and reserves frequencies of 4.5 GHz and 28 GHz for them. Ericsson began to offer operators solutions for building private networks with high indicators of stability and performance, as well as security. Nokia Solutions have appeared in the portfolio that allow large industrial organizations to directly invest in their private networks.

Also, the development of 5G will spur home broadband connections. The average 5G home broadband connection is expected to generate more than 430GB of data per month by 2025.

According to IDC analysts, in 2018 the global infrastructure market for 5G networks amounted to $528 million, and in 2022 costs will grow to $26 billion with a CAGR of 118%.

Sylvain Fabre of Gartner believes that the spread of 5G networks will not happen as quickly as in the case of previous generations of technology.

To support market-average performance standards as 5G networks are created, operators should focus on improving the level of outdated 4G infrastructure by updating it around 5G zones, the expert said. [12]]

Nokia and Ericsson lose to Huawei despite Chinese company's troubles

At the end of December 2018, it became known that Huawei Technologies competitors could not take advantage of the failures of the Chinese company to strengthen its market position and develop advanced telecommunications equipment.

According to The Wall Street Journal (WSJ), citing data from the research company Dell'Oro Group, in January-September 2018 Huawei occupied 28% of the global telecommunications equipment market, while Nokia and Ericsson recorded 17% and 13.4%, respectively. In 2017, Huawei's share was measured at 27.1%, Nokia's - 16.8%, Ericsson - 13.2%.

Huawei faced significant challenges in 2018, with American authorities starting to discourage sales of the company's equipment in the country and calling for the same measures friendly to. USA states As a result, Huawei's business was under threat in, Japan Australia,,, Great Britain France New Zealand and some other markets.

Ericsson fails to take advantage of Huawei's failures to strengthen market position and develop advanced telecommunications equipment

Nokia and Ericsson could take advantage of Huawei's problems, but European companies are in no hurry to produce modern equipment that meets Huawei's technological level. In addition, they fear a possible retaliatory blow from China - the country's authorities may cut off Nokia and Ericsson from the giant market in the Celestial Empire if companies try to make money on the negative situation around Huawei, WSJ interlocutors say.

Major European operators that already use Huawei equipment say switching to other companies' technology will increase costs and complexities as employees will have to be trained on new products, for example.

The leaders of one of the largest British mobile operators told the newspaper that Huawei is capable of producing equipment of a certain technological level a year earlier than Nokia and Ericsson. These leaders, they said, reported to the British authorities that the exclusion of key Huawei equipment from the network infrastructure could delay the launch of 5G in Britain by about nine months. The government plans to make a decision on this issue in the spring of 2019.

A Nokia spokesman said in a conversation with the WSJ that the Finnish company already sells advanced 5G equipment in leading markets, including the United States, and has the advantage that the manufacturer can offer its products to "the entire global market."

An Ericsson spokesman said the company aims to deliver the best products and that "the competitiveness of our technology is what matters."

Ericsson and Nokia began 2019 with what Huawei does not have - permission to sell telecommunications equipment from most Western national security agencies. According to sources of the publication, Ericsson and Nokia advised the American, Canadian and British authorities on cybersecurity issues, and such negotiations are common when interacting with governments.

In the US, European telecom companies provided technical advice to   the US Congressional Intelligence Committee and the National Security Agency.

The WSJ publication also said that Nokia and Ericsson tried not to publicly oppose Huawei as they compete for the title of China's largest foreign supplier of telecommunications equipment. In 2014, China entered into an agreement with the European Union, under the terms of which it pledged to provide European companies with about 30% of the market.

12% of Nokia's revenue from sales of telecommunications equipment in 2017 came from China. In the case of Ericsson, this share was 7%.^[13]

2017

Sales of servers and DSS for telecommunications networks amounted to $10.81 billion - IDC

At the end of August 2018, the analytical company International Data Corporation (IDC) presented some results of a study of the global market for telecommunications infrastructure - computing solutions and storage systems that are used for networking.

Global expenses of operators for such products in 2017 amounted to about $10.81 billion. In subsequent years, the volume of this market will increase by about 6.2% and reach $16.35 billion in 2022 due to the fact that telecom companies are actively developing their infrastructure, researchers predict.

IDC analysts estimated the server and DSS of market for telecommunications networks at $11 billion in 2017

According to them, telecom operators are adopting the model of public cloud service providers, which are "manically" focused on self-development of software using Open Source projects, cooperation with integrators to transform their data centers into a software-defined model, sponsorship and participation in industry infrastructure consortia. In addition, emphasis is placed on moving not only applications, but also network functions to the virtualized infrastructure.

Telecommunications companies are moving to a single infrastructure platform that supports modern and new telecommunications, as well as business applications that can work interchangeably in virtual machines, containers and bare metal. Operators have discovered a model of flexible and scalable consumption of computing resources, storage and network resources.^[14]

Telcos are at the centre of the innovation curve, says IDC analyst Ashish Nadkarni. - The transition to a software-defined infrastructure allows them to focus on innovation, reduce operating costs and continue to stand out due to the uniqueness of products and services.

Market volume of $37.2 billion; change of leader - IHS Markit

The mobile infrastructure market, including all types of equipment for radio access networks (RAN), switching equipment and solutions for basic networks, decreased by 14% in 2017. Revenue from the sale of equipment for 2G, 3G and LTE networks amounted to $37.2 billion, while in 2016 the figure was $43.3 billion. The largest manufacturer of these solutions was Huawei, ahead of Ericsson. This was announced in mid-March 2018 by the analytical company IHS Markit.

Experts note that the PRC remains the largest regional market for solutions for mobile network infrastructure, but even this region has not escaped the recession.

In the final quarter, the global mobile infrastructure market gained some momentum, but this was not enough to end the whole year in the black. Despite relative stability in North America and slight growth in Japan, sales of mobile network infrastructure equipment in all regions of the world declined in 2017, and in China - especially significantly, "commented Stéphane Téral, IHS Executive Director for Research in Mobile Infrastructure and Economic Indicators of Cellular Operators. The specialist attributed the decline to the fact that the peak of the construction of LTE networks passed two years ago.[15]

As for the balance of power between vendors, the largest manufacturer of equipment for mobile infrastructure last year was the Chinese company Huawei, which managed to get ahead of Ericsson.

Major manufacturers of infrastructure for mobile networks

According to IHS estimates, the share of the Chinese vendor in the market under consideration increased from 25% in 2016 to 28% in 2017. It is noteworthy that Huawei turned out to be the only supplier of equipment for mobile networks who managed to increase their presence. The closest competitors Ericsson and Nokia lost 1% of the 2016 figures and controlled 27% and 23% of the market, respectively.

Also in the top 5 were ZTE and Samsung, whose contribution experts estimated at 13% and 3%.^[16]

Notes