• China Mobile invests in smartphone vendor Honor
• The optical networking sector is set to shrink by 8% this year 
• Maxis tipped to land shared 5G network rollout deal

In today’s industry news roundup: Huawei smartphone spin-out Honor has been given an investment boost by the world’s biggest mobile operator; The optical networking equipment sector is set to shrink in value by about $1.3bn this year; Malaysia’s Maxis is reportedly the frontrunner to be handed a major shared 5G network rollout role by the country’s government; and more!

The parent company of China Mobile, the world’s largest mobile operator (by customer base), has invested in Honor, the Chinese smartphone company that was spun out of Huawei in 2020, according to Bloomberg (no financial details were reported). Honor has been ramping up its sales, particularly in its domestic market, during the past year and, with its fortunes improving, announced late last year that it was working towards an IPO. The confirmed investment by China Mobile will help with that ambition, as well as give Honor a very powerful marketing ally – China Mobile now has more than 1 billion mobile connections and, at the end of July, had almost 528 million 5G customers. Honor could do with a boost in China right now as its market share has been slipping in recent times: According to research firm IDC, Honor was the second largest smartphone supplier in China for the full year 2023, but in the second quarter of this year it was only the fourth largest smartphone vendor in the country, behind Vivo, Huawei and Oppo, with Xiaomi snapping at its heels, reported IDC. 

Global optical network equipment revenues declined by 19% year on year in the second quarter of this year as network operators continued to use products they already held in their inventories instead of buying additional products, according to research firm Dell’Oro Group. The company didn’t give a value for the market but last year it said it was worth just over $4bn in the second quarter of 2023, so that would put the value of the market in the second quarter of this year at about $3.25bn. And the bad news for the likes of Ciena, Nokia, Infinera, Huawei, Cisco, ZTE and Ribbon Communications is that the “inventory correction” is set to continue for at least another quarter before network operators start to increase their spending on optical networking gear, according to Dell’Oro VP Jimmy Yu, who was taken aback at the decline in the value of the market in the April-to-June quarter. “It was not so much the decline in the optical transport market that surprised me, it was the magnitude and breadth,” stated Yu in this press release. “In the second quarter, nearly every region declined at a double-digit rate compared to 2Q 2023. This included a 15% decline in North America, 22% in Europe, and 28% in China to name a few,” added Yu. As a result of the magnitude of the decline, Yu has revised his outlook downwards for the full year: His current forecast is for the optical transport equipment market to decline by 8% in 2024, which would value it at about $14.7bn compared with almost $16bn in 2023.    

It’s not just the optical networking gear sector that has been suffering during the first half of this year: The Dell’Oro team also issued its latest analysis of the service provider router sector and the year on year decline in the value of that part of the telco network equipment market is even worse than in optical – an eye-watering 33%! “The service provider router market contracted for a fourth consecutive quarter due to customers pulling back on spending to lower equipment inventory,” noted Yu in this press release, which identified Cisco, Huawei and Nokia as the three biggest vendors.  “The drop in quarterly revenue was one of the worst we have seen in this market for over a decade. The only silver lining to this quarter’s results is that we believe the inventory correction is nearly complete,” added Yu. The core router segment was impacted the most – it shrank in value by about 50%. 

And to compound the misery, the value of the mobile core network market shrank by 15% year on year in the second quarter, according (again) to Dell’Oro, “marking a historic low point in growth.” Read more. 

Malaysia mobile operator Maxis looks well placed to be given the role of building the country’s second shared 5G network, according to a report from the Malay Mail that cites reports from a financial analyst firm and an investment bank. But Maxis is facing stiff competition from its domestic rivals to be selected for the roll-out by the country’s government, as we reported previously – see Malaysia’s telcos jostle over second 5G network.

The speculation comes just days after Maxis reported a healthy 4.9% year on year increase in service revenues to just over 2.2bn Malaysian ringgit ($503m)  for the second quarter. The telco has also just struck a strategic partnership with China Mobile International (CMI) “aimed at accelerating 5G initiatives and leveraging the combined strengths of both companies to foster innovation and drive growth in the telecommunications sector,” and recently announced it is using Singtel’s 5G edge and cloud resource management platform, Paragon, to offer enterprise users a secure and efficient way to make use of services and applications such as edge computing, network slicing and AI. 

Wind River is feeling pretty good about itself at the moment, as it has been ranked as the 5G cloud-native platform leader by ABI Research and named as a “top innovator and top implementer” by the analyst firm. ABI Research ranked the company ahead of SUSE, Mavenir, Red Hat, VMware, Ericsson and Nokia, as this blog shows. ”The market for 5G cloud-native platforms is competitive, with platforms playing a crucial role in packaging network applications and driving premium containers-as-a-service (CaaS) offerings. Wind River Studio stands out in this competitive landscape with broad innovations: advancing automation and reducing platform footprint, all while maintaining the integrity of a fully open-source solution. These innovations streamline operations and maximise cost savings,” noted ABI Research industry analyst Nelson Englert-Yang. “Additionally, Wind River is recognized for its impressive at-scale implementations with global operators. Overall, Wind River Studio has emerged as the leading solution in the 5G cloud-native platform market," the analyst added. Wind River’s CTO Paul Miller is naturally chuffed. "This recognition validates our efforts and relentless commitment to delivering scalable, efficient cutting-edge solutions for the telecommunications industry. As we continue to lead the competition in the 5G revolution, we remain dedicated to driving innovation and setting new benchmarks for excellence, and we are proud to be shaping the future of connectivity together with our telecom customers,” he stated. 

– The staff, TelecomTV