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Vendor revenues in the telco network infrastructure market (telco NI) grew by 5.1% in Q2 2021, after a 10% jump in Q1 2021. Overall, telecom vendors’ revenues amounted to $110.4 billion, up 7.4% from the H1 2020 period.

Telco NI vendor revenues are a mix of telco CAPEX and OPEX budgets. In Q2 2021, global telecom operator CAPEX grew at a surprisingly strong rate of 15% YoY, while OPEX (excluding depreciation & amortization) increased by 14% in the same period.

“Telcos are beginning to scale up their 5G networks and fiber access spending is strong; transport network spending is also looking up in markets where 5G penetration is high and traffic growth requires capacity increases further upstream,” said Matt Walker, chief analyst at MTN Consulting.

As a result, Huawei, Nokia, and ZTE who are also the top 5G infrastructure providers are the market share leaders in the global telco network infrastructure market. According to the analysis, on a USD basis, one of the biggest YoY telco NI sales jump in H1 2021 was recorded by Nokia, up by $1 billion. Cisco and CommScope are also included in the top ten, leveraging strength in the router market and being a key provider in the connectivity market — both fixed and mobile — respectively.

Telcos’ increased adoption of the cloud has also been evident. “Automation continues to be a key theme for telco investment as well, helping vendors with strong offerings in this area, especially those able to help telcos revamp processes to leverage new technologies,” added Walker.

Telco-webscale collaboration activity has picked up in the last 12-18 months wherein webscale operators help telcos with service and application development, shifting of workloads, and enabling cloud-based services. Delivery of 5G edge computing solutions that leverage the telco’s 5G network and the webscale operator’s global cloud coverage is also part of these collaborations.

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