In what was, overall, a difficult year, telecom equipment makers began to see improvements in the second half of 2024, according to Dell’Oro Group. The revenue drop of 11 percent was grim across all segments: for broadband access, microwave & optical transport, mobile core network (MCN), RAN, and SP Router & Switch. But growth in North America and EMEA helped to stabilize the market in the fourth quarter.
“Market conditions are expected to stabilize in 2025 on an aggregated basis, though it will still be a challenging year,” wrote Stefan Pongratz, analyst, Dell’Oro Group. “The analyst team is collectively forecasting global telecom equipment revenues across the six programs to stay flat.”
Last year’s numbers were the steepest annual decline in more than 20 years, propelling total equipment revenue to fall by 14 percent over the past two years. Optical Transport, SP Routers and RAN dropped 14 percent, while microwave transport and MCN declined in the low single digits and broadband access revenues were fairly stable.
“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,” Pongratz wrote.
Telecom Equipment Slump Began in 2023
After five consecutive years of growth and stable trends in the first half of 2023, the global telecom sales went negative in the second half of that year. Dell’Oro blamed slow uptake of 5G Standalone networks for the steep declines in wireless investments.
“This capex deceleration was not confined to the RAN and MCN segments,” Dell’Oro Group reported at the time. “Following a couple of years of robust PON investments, operators were able to curtail their home broadband capex, as well. This reduction was more than enough to offset positive developments with optical transport and SP routers.”
The slump that shaped the second half of 2023 extended into 2024, according to the Dell’Oro Group. After showing a decline of 16 percent year-over-year in the second quarter, the market began to slowly show some improvement.
