Telecoms network operators are expected to spend more on equipment for the second straight year in 2014, with China and Europe bringing a fresh spurt of growth as service providers need to build out high speed 4G mobile broadband networks.
Market research group Gartner sees global sales of network equipment to carriers rising 6% to $85.4 billion U.S. this year, up from 3% last year. Asia, excluding Japan, should grow 7%, and Europe and North America 6%.
Specialist telecoms forecaster Dell'Oro is less bullish but still expects 3% growth, compared with 2% in 2013.
The predictions are good news for Europe's network equipment makers - Sweden's Ericsson, Finland's Nokia and Franco-American group Alcatel-Lucent - but analysts do not expect a softening of brutal price competition with low-cost Chinese rivals.
Nor will all the vendors fare the same. China Mobile's huge roll-out of 4G will be more of a boon for domestic firms Huawei and ZTE that won two thirds of the work. But China is a mixed bag for Ericsson, Alcatel and Nokia, boosting sales but dragging on margins since sales there commanded lower prices.
In Europe, Ericsson and Huawei are best positioned to benefit from growth because they are major suppliers to Vodafone, which is due to spend seven billion pounds under its 'Project Spring' program by March 2016 to increase the speed and coverage of its networks.
