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After several years of growth, the Radio Access Network (RAN) market has started to stabilise, with a new report from Dell’Oro Group claiming that the market is now headed for a decline.
According to the report, between 2017 and 2021, RAN revenue grew between 40 and 50%. However, in 2022, they have flattened out, and this trend has spread into the first quarter of 2023.
“Even though it is still early days for the broader 5G journey, the challenge now is that comparison is becoming more challenging in more mature 5G markets and with slow adoption of 5G sectors the edge is not enough to spur growth, said Stephen Pongratz, vice president of Dell’Oro Group. “Meanwhile, growth from new revenue streams including fixed wireless access and enterprise LTE/5G is not growing fast enough to change the trajectory. With 5G-advanced not expected to trigger a new capex cycle, the question is no longer whether RAN will grow. Now the question is, how much will the RAN market decline before 6G arrives?”
slant slope
The report further states that the global RAN is projected to decline at a rate of 1% compound annual growth rate (CAGR) over the next five years. Analysts also expect more developed 5G regions such as North America and China to see a steep decline, while less advanced regions may fare somewhat better.
LTE is still handling the majority of mobile traffic, analysts said, but the focus is clearly on 5G when it comes to new RAN investments, it said. Even with more challenging comparisons, 5G is expected to grow by 20-30% by 2027. Still, it won’t be enough to make up for the huge decline in LTE.
“With mmWave incorporating a low single-digit share of the RAN market and growing skepticism about the MBB business case, it is worth noting that our position has not changed,” the analysts concluded. “We still envision that mmWave spectrum will play an important role in the long-term capacity roadmap.”
