Telco NI vendor revenue growth slows to 3% in 3Q22

This brief report provides a preliminary review of the 3Q22 vendor market for Telco Network Infrastructure.

As of November 9, third quarter 2022 (3Q22) earnings results are available for approximately 89% of the vendors active in the Telco Network Infrastructure (Telco NI) market. Results to date show a modest slowdown in growth. For 1Q22 and 2Q22, Telco NI revenues grew for these vendors by 6.1% and 5.3%, respectively. For the same vendors, Telco NI revenues grew by about 2.9% YoY in 3Q22. Looking to 4Q22, usually, telco spending is strong cyclically at year-end, and vendor revenues follow this. However, 4Q22 seems likely to be on the light side. Several vendors expect sequential declines, macroeconomic jitters remain, and spending has been strong for several quarters now. On the plus side, many vendors are seeing supply chain constraints start to ebb, and significant improvement seems likely by 2Q23. The publisher will formally update its network spending forecast next month. Currently, the telco Capex forecast appears broadly on track.