Market conditions for the Radio Access Network (RAN) ecosystem are improving, but remain underwhelming, according to a new report published by Dell’Oro Group.
This is due to a number of factors, such as regional 5G coverage imbalances, slower data trafgfic growth and monetisation challenges. Following the concentrated 5G rollout from 2017 to 2021, RAN investments tapered off in 2023 and 2024. Conditions are expected to improve in the short-term, but the long-term outlook remains subdued.
“The underlying message we have communicated for some time has not changed,” said Stefan Pongratz, Vice President for RAN Market Research, Dell’Oro Group. “Regional imbalances will impact the market dynamics over the short term while the long-term trajectory remains flat. This is predicated on the assumption that new RAN revenue streams from private wireless and FWA, taken together with MBB-based capacity growth, are not enough to offset slower MBB coverage-based capex.”
Other findings from the report show:
- Worldwide RAN revenues are projected to grow at a 0% CAGR over the next five years, as rapidly declining LTE revenues will offset continued 5G investments
- Medium-term risks to the baseline are balanced, while the long-term risks are tilted to the downside and characterised by the data growth uncertainty with the existing MBB use case. As the investment focus gradually shifts from coverage to capacity, one of the most significant forecast risks is slowing mobile data traffic growth. Given current network utilisation levels and data traffic trends in more advanced markets, there are serious concerns about the timing of capacity upgrades
- The mix between existing and new use cases has not changed. Private/enterprise RAN is expected to grow at a 20% plus CAGR while public RAN investments decline. At the same time, because of the lower starting point, it will take some time for private RAN to move the broader RAN needle
- 5G-Advanced positions remain unchanged. The technology will play an essential role in the broader 5G journey. However, 5G-Advanced is not expected to fuel another major capex cycle. Instead, operators will gradually transition their spending from 5G towards 5G-Advanced within their confined capex budgets
- RAN segments that are expected to grow over the next five years include 5G NR, FWA, mmWave, Open RAN, vRAN, private wireless, and small cells
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