Why Are Global Telecom Vendors Navigating Market Shake-Up?

The global telecommunications equipment market entered a turbulent phase in 2024, recording an 11% year-over-year contraction, the sharpest decline in more than 20 years.

Industry analysts cite a mix of deferred operator investments, lingering stockpiles of hardware following pandemic-era over-ordering and unfavourable comparisons against the peak of 5G rollout activity.

The confluence of pressures has cascaded directly onto the supply side, impacting both revenues and market share across the vendor ecosystem.

The Radio Access Network (RAN) segment has borne the brunt of this downturn. Once buoyed by large-scale 5G deployments, the RAN market has lost close to US$9bn since its high point in 2021.

The slowdown in operator capex has intensified vendor competition and triggered a significant shake-up in positioning among the top five global suppliers—Huawei, Ericsson, Nokia, ZTE and Samsung.

Market contraction shifts vendor fortunes

Financial disclosures underline the depth of the challenge. Nokia’s net sales fell to US$22.7bn in 2024, with its Mobile Networks division posting a 21% year-on-year sales decline.

“Our Mobile Networks business faced an exceptionally tough year, with revenues declining 21%,” said Tommi Uitto, President of Mobile Networks at Nokia, during the company’s earnings call.

“Operators are digesting inventories while macroeconomic headwinds extend sales cycles. We remain committed to selective growth opportunities, but the market is not expected to significantly rebound until 2025.”

For Ericsson, the contraction has likewise weighed on performance. Global operator hesitancy, combined with competitive pricing pressures, has eroded margins. “The RAN market is undergoing its steepest contraction in two decades,” noted Fredrik Jejdling, Executive Vice President and Head of Networks at Ericsson, in comments to the Financial Times.

“We are prioritising resilience, customer trust and maintaining competitiveness, but operators remain cautious in their spending.”

European vendors are not alone in their struggles. Initial findings from Dell’Oro Group suggest that Huawei’s resilience has reshaped market dynamics outside of its home territory.

Despite persistent US-led sanctions, the Chinese vendor expanded revenues in international markets, increasing its share by 2 to 3 percentage points since 2021.

Huawei defies geopolitical expectations

Perhaps the most surprising development has been Huawei’s performance beyond China. Contrary to policy objectives set by Western governments, Huawei’s relative strength has grown. According to Dell’Oro Group’s Vice President, Stefan Pongratz:

“Despite unprecedented geopolitical pressure, Huawei extended its leadership outside China, gaining up to three points of revenue share since 2021.

"It underlines both Huawei’s cost competitiveness and the inability of rivals to fully convert the political environment into market gains.”

The outcome sets back Western technology policy. Policymakers imposed sanctions on Huawei to strengthen alternatives, chiefly Ericsson and Nokia. Instead, the market is fragmenting further.

Operators face a complex strategic choice: pursue Huawei for its competitive cost-performance balance, turn to legacy suppliers experiencing financial headwinds or take a risk on emerging Open RAN entrants whose solutions remain immature by comparison.

Operator choices in a fragmented market

Such dynamics expose the unintended consequences of geopolitical interventions. Instead of consolidating around secure and politically supported vendors, the environment is more uncertain, forcing operators to manage a supply chain that is less predictable and potentially less secure.

Operators now face a triage of options, each fraught with trade-offs. Huawei remains technologically strong but geopolitically sensitive.

Legacy vendors such as Nokia and Ericsson are financially constrained, while Open RAN providers are still in the process of proving technical maturity at scale.

Stabilisation without growth

While market forecasts suggest stabilisation in 2025, the outlook points to flat revenues rather than meaningful growth.

Vendors will continue to face intense pressure to balance cost competitiveness with innovation and security assurances in a contracting environment.

For telcos, the vendor shake-up crystallises the crossroads moment facing global telecoms. The need to sustain long-term 5G monetisation strategies while preparing for the transition to 5G-Advanced and the eventual move toward 6G is colliding with a strained infrastructure ecosystem.

The result is a telecom supply chain under pressure and an investment climate defined by risk, resilience and redefined competitive dynamics.