MTN Consulting

Webscale capex surged by over 50% YoY in 2Q24, carrier-neutral capex grew by about 20% YoY, but telco capex remains on the decline. Results for 21 key telcos verifies that annualized capex is still trending negative: 3Q23-2Q24 capex declined by 6% YoY as telcos focus on paying down debt and stabilizing profit margins. The figure below illustrates the range of results. MTN Consulting's review of all three segments and the latest outlook for key companies can be found here: https://lnkd.in/g-x-UXGZ Posted by Matt Walker, Chief Analyst (matt@mtn-c.com).   * [To sign up for MTN Consulting's research list: https://lnkd.in/gm_q_8S8] To access our latest rundown of telco finances, see https://lnkd.in/gVyHTYkC. #networks #telcos #telecom #datacenters #towers #fiber #FTTx #5G #capex #innovation #nvidia #gpus

With NVIDIA earnings on the way, our latest quarterly review of the webscale sector is worth special attention. The key players in the webscale market are the big tech companies now spending big on GenAI. Capex from these top players surged in 2018 and again right after COVID, largely because of cloud expansion. Now GenAI hype is fueling a massive uptick in capex. It won't last forever though; these things come in cycles and there is a big dose of FOMO fueling current network spending. For more information, see the full MTN Consulting 2Q24 webscale report at https://lnkd.in/gMfrbDYe Posted by Matt Walker, Chief Analyst (matt@mtn-c.com). * [To sign up for MTN Consulting's research list: https://lnkd.in/gm_q_8S8] #datacenters #datacentres #cloud #genai #llm #webscale #hyperscale #nvidia #GPUs #networking #capex #chips

To call Cisco's recent restructuring "overdue" is a big understatement. Look no further than the company's rapid market share erosion in the telco vertical over the last few years. Just as Cisco was expecting a recovery as telcos started revamping their IP backbones and moving to stand-alone 5G, the vendor's telco market share has plunged: from 4.2% in 1Q22, it ended 1Q24 just below 1%. This kind of rapid loss of market share is rare in the telco sector, where buying decisions are usually long-term commitments. It also came as a time when one major rival, Huawei, has been hobbled by legal restrictions. Fierce Network story: https://lnkd.in/g9WTc_uz MTN Consulting's latest telco network infra market share report: https://lnkd.in/g2ftHa85 Cisco's market share in telco NI, per MTN Consulting, is shown in the attached visual. #telco #telecom #vendors #marketshare #layoffs #restructuring

With more 2Q24 telco earnings trickling out, here is a visual review of 1Q24. The below infographic showcases the most recent developments in the global telco market for 1Q24. Notably, all three key indicators—revenue, capex, and total employees—experienced a decline on a year-over-year (YoY), single-quarter basis. Key takeaways below: ·      Telco revenues dipped slightly on account of a strong US dollar, particularly affecting key operators in in Japan (KDDI, NTT, Softbank) and China (China Unicom, China Telecom). Annualized revenues though were nearly flat, achieving a mere 0.1% YoY increase to reach $1,774.9B. ·      Capex investments experienced a severe scale back in 1Q24 as they plunged by 9.4% YoY following the completion of 5G network buildouts in key markets such as the US, China, and parts of Europe. India, late to 5G, is also seeing a shift towards more normalized investment levels. This substantial quarterly decrease in capex contributed to a global decline of 6.8% YoY for the annualized period ending 1Q24. The latest 12 quarter capex figure totals to $306B. The decline had big repercussions on vendors but did not affect market positions of the top three – Huawei, Ericsson, and Nokia. ·      Among the top 10 capex spenders, only Charter Communications saw a YoY growth in 1Q24 driven by the US government’s Rural Digital Opportunity Fund (RDOF) initiative. The Broadband Equity, Access, and Deployment (BEAD) initiative is expected to provide further momentum in the coming quarters for US-based cable broadband operators. ·      Telco industry’s workforce stood at 4.49 million, down from 4.56 million a year earlier, partially offset by increases at the top three telcos in India. MTN Consulting predicts further global headcount reductions driven by the rise of Gen AI/AI and automation, attrition, and voluntary retirement schemes. ·      From a regional perspective, telcos in the Americas region led global spending in 1Q24, driven primarily by government-funded programs like BEAD and RDOF in the US. Operators such as Charter Communications are aggressively expanding rural broadband networks, outpacing all other regions. Posted by Arun Menon, Principal Analyst (arun@mtn-c.com). * For more information, see the full 1Q24 telco report at https://lnkd.in/gVyHTYkC [To sign up for MTN Consulting's research list: https://lnkd.in/gm_q_8S8] #telcos #telecom #capex #fttx #5G #RAN #sdwan #genai #ai #innovation #ruralfiber #catv #sustainability 

Analysts looking for the next big thing to hype up, and vendors in search of revenues, are all talking about 6G. My view is that a reality check is needed. Neither one of these groups can be trusted with your wallet. 5G isn't working, at least not the way these camps promised. New revenue streams aren't showing up. Telcos took on huge new costs in buying spectrum and building networks to support 5G, and they are now stuck treading water. The short-term 5G device revenue surge is now over. In the last couple of quarters, average telco margins - which are fairly stable over time - took a hit. Time to slow things down a bit, and figure out how to pay today's bills. We have provided clients with similar advice about GenAI in recent quarters, urging caution around the "fear of missing out" syndrome and calling it a bubble. That wasn't popular...at the time. Unfortunately this is one of several factors at play in the current market correction. -Matt Walker, Chief Analyst (matt@mtn-c.com) #hypecycle #bubble #telco #telecom #5G #6G #telcodebt #fomo #genai To access our latest rundown of telco finances, see https://lnkd.in/gVyHTYkC. For Webscale/big tech, see https://lnkd.in/g_BSuc65 For our March 2023 writeup on 5G's failure to deliver, see https://lnkd.in/gUNZxPtg

MTN Consulting's latest round-up of the global telco market is now out. Top-line revenues are flat, but operating costs are rising. In response, telcos are cutting headcount even faster than expected and capex is plunging. Capex will recover but we can expect the telco workforce to keep shrinking. That's in part due to ongoing telco deployment of automation and AI/GenAI technologies designed to help networks run themselves. Customer service and satisfaction will almost surely suffer. But telco profit margins have weakened in the last 2 quarters. Until there is improvement the pressure will remain high to keep costs down. That also makes it hard for western telcos to stick to plans to avoid Chinese vendors, giving them an opening for a resurgence. Prepare yourself for this change by purchasing MTN Consulting's latest deep-dive into the global telco market, below. * Questions about the global telco market? Contact the report author and our market expert Arun Menon at arun@mtn-c.com. [To sign up for MTN Consulting's research list: https://lnkd.in/gm_q_8S8] #5G #FTTH #capex #Huawei #mobilenetworks #layoffs #telcos #telecom #genai https://lnkd.in/gVyHTYkC

India's Centre for Development of Telematics (C-DOT) continues to raise its profile as a key contributor to the "Make in India" movement, helping to grow India's self-sufficiency in the telecommunications sector. Here is an interesting Light Reading story on the subject, with some input from a recent MTN Consulting report. Parts of Europe may be backing away from Chinese vendor bans, but India is firmly staying away from Huawei and other Chinese enterprises in its communications networks. A rising C-DOT and a more vibrant Indian startup scene will enable this policy stance. Gagandeep Asiwal Dr. Y V S Lakshmi Anand Mohandas Harsh Pagay Sonia Jain Jayanta Dey Mukesh Kumar Gupta Devansh Rajoriya Sakshama Ghoslya Divy Kapoor https://lnkd.in/gumhBQbr

New report out on key behind the scenes player in India's telecom scene: CDOT, the Centre for Development of Telematics: "CDOT is a widely misunderstood “public sector undertaking” (PSU) of the Indian government. It presents itself as a stodgy, outdated agency with limited relevance to fast-paced modern communications networks. It has almost no marketing or public relations function. Its website is badly outdated; the organizational timeline outlined on its site stops in 2016, for instance. Many of the products it makes available to partners through ‘transfer of technology’ (TOT) or commercialization agreements are similarly dated, and not competitive with offerings from private sector players such as Cisco, Ericsson, and Nokia. But there is far more than meets the eye. CDOT has upped its game in the last few years, boosting its speed and profile under the current CEO..." #6G #5G #quantumcommunications #pqc #India #telecom https://lnkd.in/g7beSNd3

The 10 biggest vendor spenders on R&D in 2023 (relative to revenues) were Ribbon Communications, Adtran, Spirent Communications, Harmonic, ZTE Corporation, Nokia, Ericsson, Infinera, DZS and Ciena. Excepting Spirent, a test specialist, the others could be classified as "network equipment providers" (NEPs). That's an outdated term but it still does help to differentiate vendor origins. The three largest vendors shown are Ericsson (ranked 2 in telco network infra overall), Nokia (3), and ZTE (4). Each recorded R&D spending around 19-20% of revenues. This high level of spend among the biggest players makes clear that telecom continues to rely heavily on big R&D budgets from the NEPs, even if most R&D spend is concentrated on software ("S") functions, not equipment ("E"). Note that this chart excludes vendors with less than $200M in 12 month sales to telcos, and also those whose telco sales are less than 60% of total company revenues. We also excluded Casa, an outlier which is currently in chapter 11 proceedings. -Posted by Matt Walker (matt@mtn-c.com) * Questions about telecom network, R&D or market share issues? Feel free to contact Matt or the author of our quarterly market share series, Arun Menon (arun@mtn-c.com). [To sign up for MTN Consulting's research list: https://lnkd.in/gm_q_8S8] Our latest telco network infra market share study is available here: https://lnkd.in/exrWCD8A #telcos #telecom #fttx #5G #RAN #marketshare #researchanddevelopment #innovation

https://lnkd.in/gFj2WJ8S