Ericsson leads the LTE market by a wide margin, but rivals Huawei, ZTE and Samsung will gain ground in 2013
 

Ericsson leads the LTE market by a wide margin, but rivals Huawei, ZTE and Samsung will gain ground in 2013

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For more information please go to www.tbri.com ...

For more information please go to www.tbri.com

2013 will mark the first year in which telecom equipment vendors will compensate for declining legacy
technology revenues (GSM and CDMA) with LTE revenues, bolstered by the continuance of LTE
deployments in North America and surging deployments in China and Latin America. Before LTE
revenues picked up in 2H12, most Tier 1 vendors saw infrastructure revenues slump compared to 2011,
due to declining demand for GSM and CDMA equipment.

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Ericsson leads the LTE market by a wide margin, but rivals Huawei, ZTE and Samsung will gain ground in 2013 Document Transcript

  • 1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR SPECIAL REPORT Ericsson leads the LTE market by a widemargin, but rivals Huawei, ZTE and Samsung will gain ground in 2013 Michael Soper, Networking & Mobility Practice Analyst (michael.soper@tbri.com) Chris Antlitz, Networking & Mobility Practice Analyst (chris.antlitz@tbri.com) March 5, 20132013 will mark the first year in which telecom equipment vendors will compensate for declining legacytechnology revenues (GSM and CDMA) with LTE revenues, bolstered by the continuance of LTEdeployments in North America and surging deployments in China and Latin America. Before LTErevenues picked up in 2H12, most Tier 1 vendors saw infrastructure revenues slump compared to 2011,due to declining demand for GSM and CDMA equipment.This special report assesses the LTE marketplace and ranks the leading vendors in LTE by revenue in2012 as well as provides an outlook for 2013 based on TBR’s estimates. This report will provide insightsaround three key areas:  Which vendors led the LTE market, in revenue, in 2012, and what drove their success?  What will the LTE market share picture look like in 2013 once operators in more regions start deploying LTE networks?  What is the LTE market opportunity for telecom vendors beyond 2013?Ericsson leads the LTE market by a wide marginEricsson took a commanding lead in LTE market share in 2012 due to its strong position with keyoperators in North America, Japan and South Korea. Ericsson is deploying LTE for five of the seven Tier 1operators in North America: Verizon, AT&T, Sprint, T-Mobile and Rogers. Ericsson is deploying LTE forSoftbank in Japan and all three Tier 1 operators in South Korea, LG U+, SK Telecom and KT. These
  • 2. TBRoperators were among the first adopters of LTE technology, and Ericsson’s key position within theseaccounts allowed the company to pull far ahead of competitors in LTE revenue.NSN benefited from strong operator spending on LTE in Japan, South Korea and Canada, but the vendorlargely sat out of the first phase of deployments in the United States, which prevented the companyfrom nearing Ericsson’s market share.In 2012 Huawei ranked third in LTE market share, but the vendor was prevented from becoming a biggerthreat to Ericsson and NSN because the vendor is largely prohibited from doing business in the UnitedStates. However, TBR expects Huawei’s LTE market share to increase in 2013 as its contracts in otherregions, namely Europe and APAC, start to ramp up.Alcatel-Lucent placed fourth, as the bulk of the company’s LTE revenue stems from three operators —AT&T, Verizon and Sprint — that are also purchasing LTE from Ericsson. Alcatel-Lucent did not win LTEsupply agreements with Japan- and South Korea-based operators, which prevented the vendor fromplacing among the top three.Tier 2 LTE vendors Samsung and Fujitsu are supplying LTE infrastructure in concentrated markets.Samsung is most active in Japan, South Korea and the United States, but won deals with Reliance in Indiaand 3 U.K. in 2H12, positioning the company to expand its market reach and challenge incumbents inEurope and emerging markets. Fujitsu participated in Japan’s LTE rollout, primarily with NTT DoCoMo,and as these deployments wind down, so too will Fujitsu’s LTE revenues, leading to a loss of marketshare in 2013.ZTE is a major Tier 1 telecom infrastructure vendor, but the bulk of its wireless revenue remains tied upin legacy technologies such as CDMA and GSM, which it supplies in bulk to China-based operators. ZTEdid not participate in LTE deployments in North America, Japan or South Korea, giving it the lowestmarket share rank. However, ZTE will start to gain ground in LTE in 2013, when China Mobile begins itsmassive deployment and other operators in emerging markets start to deploy LTE, though on a muchsmaller scale. www.tbri.com
  • 3. TBR TBR Estimated 2013 LTE 2012 LTE Market Share Market Share Ericsson 34% 32% NSN 21% 21% Huawei 18% 20% Alcatel-Lucent 9% 10% Samsung 7% 9% Fujitsu 7% 4% ZTE 4% 6% SOURCE: TBR ESTIMATES AND COMPANY REPORTED DATA Note: Market share is based on LTE revenue, which includes LTE RAN and core equipment.Ericsson will again lead the LTE market in 2013, but rivals such as Huawei, ZTEand Alcatel-Lucent will gain shareCapex budget guidance indicates North America-based operators will continue spending aggressively onLTE equipment in 2013, enabling Ericsson to once again claim LTE leadership. The Sprint Network Visionwill continue to ramp up, benefitting Ericsson, Alcatel-Lucent and Samsung. Latin America will also fuelEricsson’s LTE revenues as the vendor secured more than 50% market share in the region for LTEdeployments, locking in contracts with Une, Oi, Vivo, Telcel, Claro and TIM Brasil.NSN enters 2013 with uncertainty around its long-term LTE prospects. With Japan- and South Korea-based operators putting the finishing touches on their LTE networks and shifting their focus fromcoverage to capacity enhancement, NSN will need to increase its focus on the U.S., leveraging itscontracts with T-Mobile USA and U.S. Cellular to boost LTE revenue. Latin America will also contribute,as LTE rollouts are underway in Brazil, where NSN holds contracts with America Movil’s Claro brand, TIMand Oi.Huawei, Alcatel-Lucent and ZTE will see their LTE fortunes rise as China Mobile, the largest operator inthe world by subscriber count, deploys TD-LTE. The operator plans to deploy 200,000 TD-LTE basestations in 2013 in a bid to jumpstart its 4G network, and these three vendors are likely to land thehighest shares of the contract. Huawei and ZTE will benefit from select LTE rollouts in Europe, whereChina-based vendors will be aggressive on price to supplant NSN and Alcatel-Lucent from existingaccounts.Europe, China and India will ramp up LTE investment in 2014 and 2015,unlocking opportunities to grow LTE revenues www.tbri.com
  • 4. TBRA multitude of operators in Europe delayed their LTE investments during the economic malaise thatcontinues to grip the continent. Outside of the Nordics, carriers are delaying their LTE rollouts due to theuncertain economic and political environment. When LTE activity picks up in regions including westernand central Europe, incumbents like Ericsson, Alcatel-Lucent and NSN will face greater competition fromHuawei, which has made significant inroads since the 3G investment cycle and subsequent networkmodernization investment cycle. Carriers in eastern Europe are more price conscious and, therefore,more likely to select Huawei or ZTE.TD-LTE deployments in India and ongoing rollouts in China will occur in 2014. Operators in Indiacontinue to face an uncertain regulatory environment and a crowded marketplace. Consolidation isneeded before carriers embark on massive infrastructure deployments. In 2014 China Mobile will deployan additional 150,000 TD-LTE base stations.Technology Business Research, Inc. is a leading independent technology market research and consulting firmspecializing in the business and financial analyses of hardware, software, networking equipment, wireless, portaland professional services vendors. Serving a global clientele, TBR provides timely and accurate market research andbusiness intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to furtheraddress client-specific issues or information needs on an inquiry or proprietary consulting basis.TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.©2013 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other publicsources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable orresponsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is notand should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value,purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact TechnologyBusiness Research, Inc. for permission to reproduce. www.tbri.com