After several years of growth, the Radio Access Network (RAN) market has begun to plateau, a new report from the Dell’Oro Group has claimed adding that the market now appears poised for a decline.
As per the report, between 2017 and 2021, RAN revenues grew between 40 and 50%. In 2022, however, they flattened out, with the trend spilling into the first quarter of 2023.
“Even if it is early days in the broader 5G journey, the challenge now is the comparisons are becoming more challenging in the more mature 5G markets and the upside with the slower-to-adopt 5G regions is not enough to extend the growth streak,” said Stefan Pongratz, Vice President at Dell’Oro Group. “Meanwhile, growth from new revenue streams including Fixed Wireless Access and enterprise LTE/5G is not ramping fast enough to change the trajectory. With 5G-Advanced not expected to trigger a new capex cycle, the question now is no longer whether RAN will grow. The question now is, rather, how much will the RAN market decline before 6G comes along?”
Over the next five years, the report further states, global RAN is projected to decline at a 1% compound annual growth rate (CAGR) over the next five years. The analysts also expect steeper declines in more developed 5G regions such as North America and China, while the less advanced regions might perform somewhat better.
LTE is still handling most of mobile traffic, the analysts said, but when it comes to new RAN investments the focus is clearly on 5G, it was said. Even with the more challenging comparisons, 5G is expected to grow by another 20-30% by 2027. Still, that won’t be enough to offset steep declines in LTE.
“With mmWave comprising a low single-digit share of the RAN market and skepticism growing about the MBB business case, it is worth noting that our position has not changed,” the analysts concluded. “We still envision that the mmWave spectrum will play a pivotal role in the long-term capacity roadmap.”