Samsung, Ericsson Increase Network Gear Market Share

Ericsson increased its mobile networks market share during the second quarter, while Samsung Electronics ranked into the fourth place, according to the data from research firm Dell’Oro.

Ericsson flag pictured in front blue skies

Ericsson, which is the second largest maker of radio access network (RAN) gear, as well as Samsung benefited from the increasing US demand as China’s ZTE slipped into the fifth place following US sanctions in April.

The world’s largest gear vendors (Huawei is the ranked first, Ericsson and Nokia ranked third) all expanded their market share quarter on quarter. This was in part due to ZTE’s plunge from April onward, Dell’Oro analyst Stefan Pongratz said in a statement.

“Ericsson was the only vendor of the top three that gained share,” he stated, adding that the Swedish company’s share of network gear revenues rose about 1 percentage point during the second quarter.

Dell’Oro data on network equipment is generally regarded as the benchmark for market share rankings within the industry. It didn’t disclose, however, the actual revenue figures.

Mobile suppliers have been having a hard time with declining growth since the demand for 4G network gear peaked in the year 2015. However, the industry is now preparing the first upgrades to next-generation 5G networks beginning later this year and on into 2019 in the United States.

The battle for the market share takes on added importance because contract victories at network suppliers usually increase the chance for follow-on network gear sales as 5G is set to go mainstream after 2020, pledging to return network makers Ericsson and Nokia to revenue growth.

Ericsson’s most recent boost came in part from its replacement of ZTE as radio gear supplier to Italian mobile firm Wind Tre. The company also benefitted from faster network upgrades in North American market, where it ranks as the biggest supplier, exceeding Nokia.

Samsung is ranked  third in North American, fourth worldwide, according to Dell’Oro.

Network sales in North America increased by double-digit percentages during the first half, Dell’Oro estimated.

From a small base, Samsung’s share of revenue in the North American area increased three-fold during the first half of this year, Dell’Oro stated, without divulging any specific figures.

This reflected Samsung’s growing role in the supplying the biggest US mobile operator Verizon, an uptick in spending at Sprint, and capacity upgrades of existing gear in South Korea, which is its home market, Dell’Oro said.

Samsung, which is the world’s biggest maker of semiconductors, smartphones, and consumer electronics, is a late comer in networks. Samsung aims to use the transition to newer 5G gear to catapult to the top ranks of the industry.

Global leader Huawei, which is a top supplier in China, the world’s largest smartphone mobile market,  has benefited from strong international momentum in spite being virtually banned in Australia  and being locked out in the United States over national security threats.

Huawei ranks fourth in North America, according to the deals in Canada and Mexico.

In mid-July, the US Department of Commerce lifted a ban on US companies that are selling goods to ZTE Corp, permitting China’s second largest telecommunications equipment maker to resume business in markets worldwide.

Both ZTE and Huawei continue to face sales restriction in the United States.

“The more interesting question, going forward, will be if Samsung has gained enough momentum to maintain its No. 4 position when ZTE shipments start ramping in the second half of 2018,” said Pongratz.

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