ZTE, according to Ovum data, has taken the second spot in wireline broadband after Huawei, displacing Alcatel-Lucent from that position and creating more momentum for Asian giants in the space. The problem is that wireline broadband ROI is exceptionally low and still falling, and operators have little choice but to look for a way to control costs.
There’s obviously no end to the pressure on ROI, and so far no vendor (including Alcatel-Lucent) has managed to develop a real strategy for lowering opex broadly. The result is that operators are pinching their capital budgets.
We noted in our spring survey that operators who had already selected either Huawei or ZTE tended to believe they had the best ROI option in hand and proceeded with their projects, while those who’d selected other vendors were still sharpening pencils. That means more non-China capital spending is likely to slip into 2H10.