Networks & Service Platforms
April 2019
Guang Yang
Tel: +86 138 0137 2507;
email: gyang@;
Report Snapshot
5G commercial services are being rolled out in advanced markets
most notably US and South Korea etc. With the deployment of 5G
the global mobile industry is entering a new cycle of market
competition.
This report first examines RAN vendor competitiveness from
multiple aspects including equipment performance, RAN product
portfolio, R&D investment etc.
Strategy Analytics then projects the 5G RAN market for 2023 and
the likely number of 5G subscribers who will be served by different
vendors’5G RAN equipment.
Finally, the report summarizes the likely share of global
subscribers for the top 3 RAN vendors -Ericsson, Huawei, Nokia
and for all others combined.
Networks & Service Platforms (NSP)
Comparison and 2023 5G Global Market Potential for leading
5G RAN Vendors – Ericsson, Huawei and Nokia
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 2 of 13
Introduction
5G commercial services are being rolled out in advanced markets most notably US and South Korea. The global
mobile industry is entering a new cycle of market competition. The rollout of a new generation wireless technology
always creates an opportunity for challengers to catch market share but also stimulates the traditional leaders to
defend their market positions. Although new 4G/LTE deployments and upgrades continue to roll out at a fast pace,
there is new pressure for 4G systems to be ‘5G Ready’. As 5G becomes a commercial reality over the next few
years the infrastructure vendor community is changing dramatically to allow for more open, scalable, software
driven, intelligent radio access networks (RANs) Some vendors will rise while others may decline or merge with new
innovative players.. This is a good time to evaluate the competitiveness of today’s leading vendors and assess the
outlook for their market potential for coming 5G era.
This report first examines RAN vendor competitiveness from multiple aspects including equipment performance,
completeness of the RAN product portfolio, standards contributions and patents, Research and Development (R&D)
investment, and engineering and deployment support. Strategy Analytics then projects the 5G RAN market for 2023
and the likely number of 5G subscribers who will be served by different vendors’ 5G RAN equipment. Through both
qualitative and quantitative analyses, the report compares the overall competitive positions of the top 3 RAN
vendors: Ericsson, Huawei and Nokia.
Performance
It is usually difficult to directly compare the performance of different vendors’ RAN solutions, because of the diverse
deployment environments, test configurations and methodologies and measurement instruments, etc. China’s IMT-
2020 Group recently had an opportunity to benchmark several major vendors’ 5G RAN solutions. The Group set up
a test environment in a suburban area of Beijing in early 2018. The leading 5G infrastructure equipment vendors
were invited to participate in the test.
The tests included both single user and cell performance tests for both Non-Standalone Architecture (NSA) and
Standalone Architecture (SA) 5G Configurations.
The China IMT-2020 Group released the NSA test results in September 2018 and the SA test results in January
2019. The Group stated that almost all the tested systems reached or exceeded their performance requirements.
The exhibits below summarize the test results for the three leading global vendors. More details about the tests can
be found in the appendix and on the IMT-2020 Group website.
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 3 of 13
Exhibit 1: Single User Performance in China IMT-2020 Group Test
Source: China IMT-2020 Group
Exhibit 2: Cell Downlink Throughput (Gbps)
Source: China IMT-2020 Group
From the above exhibits it can be seen that Huawei’s RAN solution demonstrated significant advantages under the
test conditions of China IMT-2020 Group. Commercial 5G RAN products were not available when China IMT-2020
Group did the test in 2018 so different vendors used different numbers of test devices – See Appendix. Chinese
operators are going to do large scale 5G trials in 2019 to further verify vendors’ commercial 5G products. A more
comprehensive view of all the vendors’ performance is expected when the operators’ trials complete.
Completeness of 5G Product Portfolio
All major infrastructure vendors claim that they can provide a full portfolio of 5G RAN products - including the
Baseband Unit (BBU), Active Antenna Unit (AAU) for macro cells, AAU for micro cells and small cells and all the
required transport connectivity equipment, etc. All the leading vendors are also working on custom 5G chipsets for
their 5G base stations that will simultaneously improve performance and lower power consumption as well as the
0
1
2
3
4
0
1
2
Huawei Ericsson Nokia
A
ir
In
te
rf
ac
e
L
at
e
n
cy
(
m
s)
P
e
ak
D
at
a
R
at
e
(
G
b
p
s)
DL Peak Data Rate UL Peak Data Rate Air Interface Latency
0
2
4
6
8
10
12
14
16
Huawei Ericsson Nokia
Peak Throughput - NSA Peak Throughput - SA Average Throughput - SA
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 4 of 13
physical equipment footprint. Vendors, however have different priorities for their 5G product roadmap, which varies
with operator demands in their ‘anchor’ 5G markets as well as on their specific competitive situation.
For example, Huawei’s ’Dual-200’ C-band Massive MIMO AAU and its 5G base station core chipset
“TIANGANG” can support 200W transmission power and 200MHz bandwidth that perfectly meets the requirements
of Asian operators . China Mobile, who own more than 100 MHz of 5G spectrum. On the other hand, Ericsson
and Nokia have put significant effort into the mmWave band to meet the requirements of the US market. Ericsson
has worked with IBM to create a compact silicon-based mmWave phased array integrated circuit. Ericsson’s 5G
High-band Massive MIMO solution recently won the “Best Mobile Network Infrastructure” award at the Global
Mobile Awards (GLOMO) 2019. During MWC 2019, Nokia announced a mmWave small cell that offers flexible
deployment options to cover extremely high traffic in outdoor areas with very high capacity 5G connectivity.
Since the early 5G networks work primarily in the medium and high frequency bands, leading vendors are all paying
lots of attention to 5G small cells with indoor options. These include Huawei’s 5G Lampsite, Ericsson’s 5G Radio
Dot, and Nokia’s small cell solution. 5G small cell systems, such as Huawei’s Digital Indoor System or Nokia’s
Hybrid Radio Indoor solution offer intelligent processing that can not only provide 5G connectivity but also enable
innovative services ‘at the edge’.
Standards Contributions and Patents
All 5G products need to be compliant with 3GPP standards. Companies who actively contribute to 3GPP standards
activities can often get a ‘first mover’ advantage on their product roadmap and sometimes even establish strong
Intellectual Property Rights (IPR). The number of standards contributions and of Standard Essential Patents (SEPs)
may also indicate a company’s research capability and its technological influence in the industry.
As the exhibit below shows all three leading infrastructure vendors are active players in 3GPP 5G standardization.
Every one of them is a major owner of 5G SEPs. According to IPlytics GmbH, Huawei is the in terms of the
number of 5G SEPs, the number of 5G standards contributions and the number of employees attending 5G
standard meetings. Ericsson and Nokia are also among the leading companies in these aspects.
Exhibit 3: Leading Vendors’ Standard Contribution and 5G Standard Essential Patents by February 2019
Type and Criteria Huawei Ericsson Nokia
5G SEP (Standard
Essential Patents)
# of 5G SEPs 1,529 812 1,397
Ranking 1 5 2
5G Standard
Contribution
# of 5G standard contributions 11,424
18,671 (+
Hisilicon1)
10,351 6,878
Ranking 1 2 4 (behind
Hisilicon)
Attending 5G Standard
Meeting
# of Attending Employees at 5G
standard meetings
1,975 1,538 1,232
Ranking 1 2 4
Source: IPlytics
The exhibit above demonstrates the strong leadership of all three vendors in 5G standardization. A very interesting
report on ‘Estimating the future 5G patent landscape’ provides interesting additional data on the numbers of
1
Hisilicon is Huawei’s subsidiary focusing on chipset development.
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 5 of 13
technical papers submitted to 3GPP by different vendors. Such leadership must however, also be backed by huge
R&D investment.
Research and Development (R&D) Investment
All three leading infrastructure vendors are ranked among the world’s top 50 companies for R&D investment. The
exhibit below summarizes their R&D investment in 2018 based on ‘EU Industrial R&D Investment Scoreboard’ and
vendors’ annual report data converted to Euros
Exhibit 4: Leading Infrastructure Vendors’ R&D Investments 2018 (Euros)
Company World Rank* R&D Investment (€mn) R&D YoY Growth (%) R&D Intensity (%)
Huawei 5 €12,952
Nokia 27 €4,620
Ericsson 43 €3,796
* EU Industrial R&D Investment Scoreboard ranking for 2017
2
Source: Vendor annual reports, Strategy Analytics, EU
It would be unfair to directly compare the total R&D investment of Huawei with that of Nokia or Ericsson, because
Huawei has a large consumer device business while Nokia and Ericsson now focus primarily on their infrastructure
business. Perhaps we could take Apple as a reference for Huawei’s consumer business to estimate their R&D
investment on device technologies. Apple’s R&D intensity was % in 2018 according to its annual report. If we
assume 5% - 6% as Huawei’s device R&D intensity, Huawei’s R&D investment on device technologies would be
€ – billion, as the revenue from its consumer business is up to RMB billion in 2018. So the comparable
R&D investment of Huawei if the device spending is excluded would be around € – billion which is still
significantly higher than the total of Ericsson’s and Nokia’s R&D investment combined.
Despite significant cost pressure on all infrastructure vendors. The exhibit below indicates the YoY growth in R&D
investment for the three leading vendors since 2012 when ITU-R embarked on a program to develop “IMT for 2020
and beyond”, setting the stage for 5G research activities.
As the exhibit indicates, Huawei has maintained steady – even if slowing - growth in its the R&D investment; and
although its R&D expenditure was at a similar level to Ericsson’s and Nokia’s in 2011-2013, it’s higher sales growth
has seen it pull away from its rivals while maintaining an R&D intensity of 14-15% of revenue. It should be noted
that Nokia’s R&D growth rates are shown on an “organic” basis, accounting for the divestment of HERE in 2015 and
acquisition of Alcatel Lucent in 2016.
2
A previous version of this report relied on R&D data from The 2018 EU Industrial R&D Investment
Scoreboard. All values have been updated based on reported values and exchange rates in the vendors’
annual reports.
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 6 of 13
Exhibit 5: R&D Investment YoY Growth 2012 – 20183
Source: Strategy Analytics
Engineering and Deployment Support
5G raises significant engineering and deployment challenges for operators RF planning, cell site acquisition,
network engineering and installation processes. 4G, 3G and even 2G will probably co-exist alongside 5G in most
operators’ networks. The cell sites and cell towers are often crowded, so it may frequently be difficult to install a new
5G base station or large heavy massive MIMO antennas. Leading vendors are working aggressively to automate
the design, and improve the efficiency of use of site resources across multiple dimensions to ease the 5G rollout.
Huawei announced a simplified site solution before MWC 2019. Huawei’s 5G Blade AAU supports all Radio
Access Technologies (RATs) and frequency bands, and can integrate both active and passive antennas. It meets
the installation requirements of most existing sites and Huawei considers it essential on microwave backhaul. Its’
simplified “1+2” microwave solution can provide up to 20+Gbps capacity, while achieving 50% savings in tower
space and engineering costs.
Ericsson’s Dynamic Spectrum Sharing enables operators to flexibly and quickly introduce and/or add 5G within
existing 4G carriers. This solution is to be used by Swisscom to quickly roll out 5G coverage for 90% of Switzerland
by the end of 2019. Nokia’s innovations in virtualized RAN and Open RAN also stand out as solutions designed to
enable a smooth migration from 4G to 5G, with its recent win at Rakuten a good proof point here.
Machine learning and Artificial Intelligence (AI) tools have become important differentiators for all three leading
vendors to enable service providers to automate RAN configuration, manage multiple remote sites and ease
converged 5G network operations. Some detailed analyses can be found in our previous report Complex
Converged 5G Network Operations Demand Automation and AI.
Vendors still have a lot of work to do to simplify their solutions and to facilitate automation of network operations to
help operators lower network costs and accelerate time-to-market (TTM). Technical innovations including advanced
materials, clever industry design and new processes for multi-vendor integration, management and orchestration
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 7 of 13
will be key to 5G success. And as TTM becomes critical for rapid 5G deployment, infrastructure vendors are
focusing increasingly on professional services that will not only improve the flexibility and standardization of the cell
sites and network infrastructure, but also enhance collaboration between telecom operators, tower companies,
property owners, local authorities, etc.
Besides RAN technology solutions a vendor will be judged by its ability to support flexible and rapid 5G rollout that
enables its service provider customers to respond fast to new market demands.
Since Q4 2018 when South Korean operators kicked off 5G rollout they have deployed more than 82,000 5G base
stations through early April 2019. This rapid deployment has placed very tough requirements for vendor delivery to
meet the operator’s rollout plans. Any vendor that does not adopt new rapid deployment processes is likely to lose
market position. One recent example is described in the South Korean media report, where the 5G rollout in some
South Korean cities has been delayed by slow delivery of 5G equipment. Fast delivery and quick response time
under changing conditions has become critical selection criteria for 5G vendors.
Summary of Vendor Differentiators
So how do the vendors compare in terms of performance, completeness of 5G product portfolio, standards
contributions and patents, R&D investment and engineering and deployment support? We have quantified the
discussion above in terms and the results are represented in the radar chart below.
Exhibit 6: Radar Chart for Leading Vendors’ 5G RAN Competitiveness
Source: Strategy Analytics
As the exhibit indicates all three vendors have virtually complete product portfolios, and while Ericsson’s
performance and global engineering support are ranked higher than Nokia’s, Nokia’s R&D Investment has been
more consistent in recent years.
0
1
2
3
4
5
Performance
Product Portfolio
Standard
Contributions and
Patents
R&D Investment
Engineering and
Deployment
Support
Huawei
Ericsson
Nokia
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 8 of 13
Current 5G Activities by Vendors
In early 2019, 5G commercial deployments are only just beginning but the leading vendors are already having
significant success with large numbers of MOUs (Memos of Understanding) or engagements for field trials as well
as an increasing number of first 5G RAN commercial deployments. According to vendors’ press releases and
announcements, the three global leading vendors and Samsung have signed more than 90 5G commercial
agreements and almost 200 pre-commercial 5G trials/MOU/engagements with global mobile operators.
As a relatively new player - Samsung - is making a big impact with its dominant position in one of the earliest 5G
markets - South Korea. Since South Korea issued 5G licenses in last June, SK Telecom, KT and LG U+ have
deployed 38,000, 30,000 and 18,000 5G base stations respectively through early April 2019. Samsung has
provided more than 53,000 5G radio base stations to the three operators including LGU + where it is providing a
some base stations alongside their primary vendor Huawei. Samsung is also starting to penetrate the US market
and as Asia Nikkei commented in December 2018 “has managed to fill a void in the . market left by Chinese
manufacturers”.
Potential Total Addressable Market Forecast
Strategy Analytics has analyzed the 5G RAN market as measured by the number of 5G subscribers served by 5G
radio networks using RAN equipment from different vendors. To evaluate the potential 5G market Strategy Analytics
has built up a view of potential 5G subscribers by operator by country and region. This view was developed based
on expected deployments following on from existing trials and commercial agreements, as well as current operator
and installed RAN vendor relationships for 4G, and anticipated 5G RAN relationships. While Huawei may potentially
remain excluded from markets such as the US, Australia and New Zealand, this analysis assumes that in most
markets where regulators have expressed some concerns about the use of Huawei’s 5G core software, any
additional bans will relate primarily to the 5G core equipment and not the 5G RAN.
5G Market takes off in 2023.
By 2023 5G deployments will begin to accelerate rapidly as a large number of markets will have deployed initial 5G
networks and many will start to see healthy growth in subscriber volumes, with an estimated total of 785 million
connections on 5G networks across mobile applications, IOT, and fixed wireless access services.
Exhibit 7: 5G Subscriptions by Service Type, 2023
Source: Strategy Analytics
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 9 of 13
Projected Vendor Shares of RAN subscribers served in 2023
Based on the subscriber projections above, Strategy Analytics estimated the likely share of 5G subscribers served
by each vendor’s 5G Radio Access Network (RAN) equipment, As the exhibit below indicates Huawei is projected to
have a narrow lead with % of the global market closely followed by Ericsson and Nokia in a virtual dead heat at
% and % respectively. ’Others’ including Samsung and ZTE and some new emerging small OpenRAN
players will be beginning to take share from the three leading players. See Strategy Analytics recent report ‘How
Open Could Radio Access Network Be?
In 2023 China and the US 5G markets will dominate the global numbers, as together they account for 60% of 5G
subscribers worldwide. Huawei is projected to have a healthy lead in the global 5G market outside the US,
leveraged by large early volume in China. Outside China, however, Ericsson and Nokia will lead the market helped
by their strong positions in the US.
Exhibit 8: Projected Global 5G Share of RAN Subscribers Served by Vendor in 2023
Source: Strategy Analytics, Service Provider Group
Summary
By 2023 5G looks to be a very competitive market where economies of scale and premium technology will ensure
that costs per GByte of throughput continue to fall to make 5G an affordable technology on a global basis. Huawei
has a two point lead in share of 2023’s 5G subscribers served, although Huawei, Ericsson and Nokia shares are
broadly similar. This creates strong global competition but also leaves a healthy opportunity for smaller vendors to
find their niches below these three.
By 2023 5G looks to be a very competitive global market as this premium technology finally achieves economies of
scale that will drive down the costs per GByte of throughput to make 5G an affordable technology on a global basis.
The neck and neck battle between Huawei, Ericsson and Nokia for share of 2023’s 5G radio access networks it
expected to further reduce costs for all 5G market segments.
Huawei,
%
Ericsson,
%
Nokia, %
Others,
%
5G Subscriber Share by RAN Vendor, 2023
Source: Strategy Analytics, 2019
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 10 of 13
5G will be the first new wireless generation where China is an early adopter. The huge scale of China’s early market
is expected to drive down 5G costs even more rapidly than in previous generations. Both Chinese and non-Chinese
vendors who are able to compete effectively in the Chinese market are likely to further improve their market position
globally as a result. China’s 5G market is worth monitoring closely.
R&D investment backed by market scale will be the most crucial factor that determines the long term 5G RAN
competitiveness of the infrastructure vendors. It will determine their rankings in the 5G market in the long run.
Despite this battle of the giants, there are likely to still be ‘niche’ opportunities for small players and new vendors
who can draw on COTS (Commercial off the Shelf) components to offer a complete range of mobile, IoT and fixed
solutions for both dense urban and rural 5G deployments.
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 11 of 13
How Can We Help You?
Strategy Analytics provides strategic and tactical support to global clients through a range of customized
solutions:
Multi-Country primary research assignments using leading edge tools and techniques
User Experience Design and Innovation engagements
Real Time Mobile Consumer On-Device Tracking projects
B2B Consulting Projects and Whitepapers
Please contact us at Custom@ with any questions and for further details about how
we can work with you to create a custom solution that addresses your specific needs.
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 12 of 13
Appendix – China IMT-2020 Group 5G Field Test Conditions
Test Location
Test Conditions for NSA Architecture
Peak Cell Throughput
Vendor # of Antenna
Ports
# of Antenna
Elements
# of Test
Devices
Modulation
Scheme
System
Bandwidth
Huawei 64 192 16/6 256/256 QAM 100 MHz
Ericsson 64 192 4 256/64 QAM 100 MHz
Nokia 64 192 2 256/64 QAM 100 MHz
Single User Peak Data Rate
Vendor MIMO Modulation System
bandwidth
Huawei 2T4R 256/256 QAM 100 MHz
Ericsson 2T4R 256/64 QAM 100 MHz
Nokia 2T4R 256/64 QAM 100 MHz
Test Conditions for SA Architecture
Peak Cell Throughput
Vendor # of Antenna
Ports
# of Antenna
Elements
# of Test
Devices
Modulation
Scheme
System
Bandwidth
Huawei 64 192 22/8 256/256 QAM 100 MHz
Ericsson 64 192 4/4 256/64 QAM 100 MHz
Nokia N/A N/A N/A N/A N/A
Networks & Service Platforms
Copyright
©
Strategy Analytics 2019 | 13 of 13
Average Cell Throughput
Vendor Test terminal distribution (near point
/ middle point / far point)
System bandwidth
Huawei 2 / 4 / 2 100 MHz
Ericsson 1 / 2 / 1 100 MHz
Nokia N/A N/A
Single User Peak Data Rate
Vendor MIMO Modulation System bandwidth
Huawei 2T4R 256/256 QAM 100 MHz
Ericsson 2T4R 256/64 QAM 100 MHz
Nokia 2T4R 256/64 QAM 100 MHz
