Huawei Leads Its European Rivals in Global Telecom Revenue Despite U.S. Sanctions
Its share of global revenue widened to 30% in 2023 compared with 28% in 2022.
Despite a US-led effort against Huawei Technologies banning US companies from doing business with the company, the Chinese leader in IT infrastructure is maintaining its competitive edge in the global telecom equipment industry in 2023, according to preliminary data by Dell’Oro Group.
In fact, Huawei's network equipment division outperformed European rivals, Ericsson and Nokia last year. Huawei’s share of global revenue widened to 30% in 2023 compared with 28% in 2022. Nokia’s share was flat at 15% while Ericsson’s fell from 15% in 2022 to 14%. ZTE with 11%, was fourth overall, while Cisco secured fifth place as it increased its proportion from 5 to 6%.
This resilience stems from several factors. First, the Chinese market, massive and hungry for network infrastructure, offers a strong counterweight to any losses in Europe. Second, Huawei remains a vital player in the global network buildout (including 5G) for many countries.
This dominance is reflected in its surging revenue, likely fueled in part by its leadership in 5G technology. This stands in stark contrast to Ericsson and Nokia, which saw declining revenues and net income in the network business.
Henry Chikwem
Huawei's networks unit (also called its "ICT infrastructure" business) revenues were up 27%, to about CNY362 billion ($50 billion) from CNY284 billion ($39 billion) in 2022. On a constant-currency basis, Nokia's (generated almost entirely from network sales) fell 8% while revenues at Ericson's mobile networks unit dropped 15%.
Huawei's dominance can be attributed to its unwavering commitment to research and development (R&D). In 2022, the company invested a staggering 25.1% of its revenue in R&D, leading to advancements that set new standards for network infrastructure.
While challenges remain, particularly in accessing advanced chip foundries like Samsung and TSMC, Huawei continues to innovate. For instance, their gallium nitride-based power amplifiers are setting industry standards despite limitations imposed by sanctions. This focus on innovation, coupled with a strong domestic market and unwavering R&D investment, has propelled Huawei to new heights despite the pressures of US sanctions.
Henry Chikwem
