Global telecom infra faced the ultimate pitfall in 2024

• According to Dell’Oro, the telco equipment market was down across the board in 2024, and 2025 isn’t looking too great, either
• 5G adoption challenges, excess inventory and the macro economy all impacted the decline
• Huawei remains on top of the food chain amid the global equipment slump

Despite the telecom industry’s hopes that 2025 will usher in a turnaround for the global equipment market, there’s no sugarcoating just how bad 2024 played out across the board.

According to Dell’Oro, worldwide telecom equipment revenues in 2024 dropped 11% year-over-year – marking “the steepest annual decline in more than 20 years.” Ouch.

The nosedive encompassed multiple segments, including broadband access, microwave and optical transport, mobile core networks (MCN), RAN and the service provider router and switch market.

“This remarkable output deceleration was broad-based across the telecom segments and driven by multiple factors, including excess inventory, challenging macro environment, and difficult 5G comparisons,” wrote Dell’Oro Group VP Stefan Pongratz.

Fierce reached out to Dell’Oro for further comment and we will update this story if we hear back.

We’ve heard ad nauseam about the inventory issues plaguing vendors, as service providers pulled the brakes on new equipment orders following the Covid-19 pandemic. Only now is the supply chain starting to recover, with Ciena for instance noting its problems with “inventory digestion” are mostly over.

But the prospect of the Trump administration’s tariffs doesn’t bode well for the telecom equipment market. Vendors may have to take at least 6-12 months to retool their supply chains due to tariffs, AvidThink Principal Roy Chua has said. And given the “will-they, won’t-they” situation going on with the tariffs, their ultimate impact remains to be seen.

On the 5G front, it’s been six years since the technology rolled out commercially. But aside from deploying fixed wireless access (FWA), telcos have struggled to “find large use cases that require 5G speeds and features,” Deloitte said in its latest telecom industry forecast.

“Not only were there seemingly few additional use cases driving 5G adoption and monetization in 2024, but there may not be many more for 2025 or even 2026 either,” the firm wrote.

That’s because things that require the speeds and low latencies 5G offers like self-driving cars, augmented/virtual reality goggles and remote telesurgery “are not expected to see broad adoption until the end of this decade, if at all,” Deloitte noted.

Huawei takes the cake

Although Huawei equipment has faced hefty opposition within the U.S., it’s not so surprising the Chinese telecom vendor is thriving in the rest of the world. Huawei in 2024 nabbed 31% of overall equipment revenue in 2024, per Dell’Oro.

“Initial estimates suggest Huawei passed Nokia to become the #1 supplier, followed by Nokia and Ericsson,” Pongratz stated.

Huawei made some waves in the autonomous network space last year, when China’s Tsinghua University unveiled it’s running the world’s first Level 4 network using Huawei gear. And China Mobile also plans to use the vendor’s software to commercially deploy autonomous networking later this year.

Nokia on the other hand hasn’t been doing so hot in with its mobile networks biz. But now that the Finnish vendor sealed the deal on its Infinera acquisition, we can expect the company to better take on the optical and cloud networking space.

All told, it’s not all doom-and-gloom for telco infra. “Market conditions are expected to stabilize in 2025 on an aggregated basis, though it will still be a challenging year,” Pongratz said.