Dell’Oro reckons the only good news is that the market is not contracting and a number of shifts are underway
According to a newly published forecast by Dell’Oro Group, market conditions are improving but “remain underwhelming” for the broader RAN ecosystem. This is due to regional 5G coverage imbalances, slower data traffic growth and “monetization challenges” weighing on the market.
After the intense 5G acceleration phase from 2017 to 2021, RAN investments tapered off in 2023 and 2024. Conditions are expected to improve slightly over the short term, but the long-term outlook remains subdued.
No change
“The underlying message we have communicated for some time has not changed,” said Stefan Pongratz, Vice President for RAN market research at 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 [fixed wireless access], taken together with MBB [mobile broadband]-based capacity growth, are not enough to offset slower MBB coverage-based capex”.
Dell’Oro projects 0% CAGR in the RAN market for the next five years as rapidly declining LTE revenues offset continued 5G investments.
It reckons medium-term, it forecasts, “risks to the baseline are balanced, while the long-term risks are tilted to the downside and characterized by the data growth uncertainty with the existing MBB use case”. In other words, as the investment focus gradually shifts from coverage to capacity, one of the most significant risks is the of growth in mobile data traffic.
The report states, “Given current network utilization levels and data traffic trends in more advanced markets, there are serious concerns about the timing of capacity upgrades”.
Shifts in use cases
Although Dell’Oro’s views on the mix of existing and new use cases has not changed, private and enterprise RAN is expected to grow at more than 20% CAGR, while public RAN investment declines. At the same time, because of the lower starting point, it will take some time for private RAN to move the overall RAN market needle.
The analyst house also remain unchanged on its stance regarding 5G-Advanced, believing the tech “will play an essential role in the broader 5G journey”. Still, 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.
Finally, the report predicts that RAN segments that will grow over the next five years include 5G NR, FWA, mmWave, Open RAN, vRAN, private wireless and small cells.
