Chinese manufacturers lead the global communication equipment market

Source：    Public date:2022-12-05 9:43:10

The COVID-19 has lasted for three years, and the world industrial economy as a whole is facing challenges. The global communication equipment market, which relies heavily on scale and demand, is inevitably affected. However, against the trend, Chinese manufacturers still handed over an excellent answer sheet.

Recently, Dell'Oro Group, a market research organization, released the ranking of manufacturers in the global communication equipment market in the first half of 2022. China's two major equipment giants, represented by Huawei and ZTE, showed strong performance. Huawei still ranked first with a share of nearly 30%, and ZTE ranked fourth, with a slightly higher share than 10.5% in 2021.

Considering the impact on overseas business in recent years, the achievements of Huawei and ZTE undoubtedly add a strong note to the positive prospects of China's communications industry. Thanks to the strong support of China's local market, Huawei and ZTE have maintained their leading edge in the global market. Dell'Oro Group data shows that in the first half of 2022, Huawei's market share in China will reach 58%, while ZTE's will reach 32%.

More powerful evidence comes from performance. The latest financial report shows that in the first half of 2022, the business income of Huawei's operators will be 142.7 billion yuan, up 4% year on year; ZTE's revenue was 59.818 billion yuan, up 12.71% year on year.

"From the overall performance of the COVID-19 in the past three years, Chinese equipment manufacturers have not been affected too much, and even achieved better performance." Yang Guang, senior strategic analyst of wireless operators of Strategy Analytics, told China Business News that this reflected the profound overall strength of China's communication equipment industry.

Powerful 5G demand in China

5G is undoubtedly the most important indicator to measure the global communication equipment market. According to GSMA research, as of the end of June 2022, 208 operators in 79 countries/regions have opened 5G networks worldwide, with the global population coverage of 5G exceeding 25%. 115 operators in 54 countries/regions have opened or intend to deploy 5G independent networking mode.

"Since 2019, the global 5G market has actually entered a period of scale growth." Zhou Guijun, editor in chief of C114 Communication Network, told the reporter that the intergenerational upgrading in the communication field is marked by the large-scale replacement of communication equipment. The investment in 5G equipment, including the core network, bearer network and access network, will be a huge expense.

Taking the 5G base station as an example, Zhou Guijun said that in 2019, the first year of China's 5G commercial use, the construction cost of the 5G base station of China's three major operators alone will reach 58.5 billion yuan, almost equivalent to the annual revenue of a global medium and large communication equipment manufacturer. With the deepening of 5G construction, the market size of 5G equipment has grown every year since then.

According to the research report of the Dell 'Oro Group, driven by the superposition of the digital economy and the COVID-19, the global communication equipment market has grown for four consecutive years, with a year-on-year growth of 7% in 2021, approaching $100 billion. Among them, the scale of China's communication equipment market is about 26 billion US dollars, accounting for about 26% of the global share.

And 5G devices account for nearly one third of them. According to public data, the global 5G network equipment market in 2022 will total about 33 billion US dollars, accounting for 33% of the global communication equipment market share. It is the main source of revenue for communication equipment manufacturers. It is estimated that by 2025, the total market size of the global 5G network equipment will exceed 40 billion dollars.

Yang Guang pointed out that it is the double round industry advantages of 5G and the Chinese market that gave birth to the positive momentum of China's communication equipment giants. According to his introduction, the global 5G communication equipment mainly includes mobile core network, wireless access network, broadband access, router, switch, optical transmission and microwave equipment, which are the main products of Huawei and ZTE.

"With the completion of the main part of 5G network construction, 5G has now entered the stage of fine coverage from wide coverage." Yang Guang pointed out that this means that the demand for network equipment, including small base stations, will dominate in the future, which will become a new opportunity for Chinese communication equipment manufacturers.