However, Open RAN revenues are still expected to rise to 15-20% of the global market by 2028
Despite having the full backing of the US government, the global Open RAN market is the antithesis of say, the global AI server market, even with solid progress in some aspects of the market. The envisioned transformation in vendor dynamics appears to be stalling, according to Stefan Pongratz, VP of RAN market research at Dell’Oro.
The analyst firm’s latest report highlights that Open RAN is projected to capture 30-40% of revenues outside China by 2028, with North America leading the adoption. Europe’s Open RAN revenues are expected to rise to 15-20% of the global market by 2028.
Outside the purist Open RAN vision though virtualisation and openness have taken root in most mobile operators which demonstrates that taken together, Open RAN, cloud RAN, and multivendor RAN are poised to hold substantial market shares.
“Open RAN is happening, but this vision that Open RAN will significantly change the vendor dynamics is fading,” said Pongratz. “With most of the leading RAN suppliers now committed to the latest O-RAN fronthaul interfaces, the question now is more about the timing and the adoption curve for the various RAN segments’”
The long-term position remains favourable and mostly unchanged. Despite ongoing challenges, most operators will gradually incorporate more openness, virtualization, intelligence, and automation into their RAN roadmaps. Dell’Oro says the pace will differ slightly between the radios and the baseband, while the multi-vendor RAN business case is less compelling.
The estimates for open RAN, cloud RAN, and multivendor RAN are mostly unchanged from the beginning of the year. By 2028, they are expected to account for >25%, 20 to 25%, and <10% of the total RAN market, respectively.
The forecast is more favorable outside of China, with Open RAN projected to comprise 30 to 40% of the revenues by 2028. North America was the largest region in 2023 and is expected to lead the broader Open RAN movement throughout the forecast period. The US government has taken Open RAN fervour to its Pacific neighbours as well with Open RAN featuring prominently in bilateral statements and through organisations like the Quad. North America stumbled in 2023 but is set to lead the Open RAN market over the forecast period.
After a slow start, Europe is projected to account for 15 to 20% of worldwide Open RAN revenues by 2028.
5G slowdown seeping through the market
Some of Europe’s slow start can be attributed to the general slowdown of 5G rollouts and this has kicked on to adjacent markets. For example, Dell’Oro Group just lowered the near-term forecast for mobile backhaul transport by approximately 6%. Demand for mobile backhaul transport equipment is now projected to be $24.5 billion over the next five years. This figure represents the cumulative amount of transport systems deployed from 2024 through 2028.
“We believe the 5G build cycle will be more gradual and calculated,” said Dell’Oro VP Jimmy Yu. “Thus, we have transplanted the reduction in mobile backhaul demand forecasted in 2024 and 2025 to the outer years of the forecast time period, creating a more moderate rise in demand over the next five years.”
Demand for mobile backhaul equipment, consisting of both wireless and fibre systems, to be used in 5G networks is now forecast to grow at a five-year compounded annual growth rate (CAGR) of 13%. Use of Wireless Systems for backhaul is projected to grow at a higher rate than fibre Systems in the next five years since more mobile radio deployments are expected to occur in countries that mostly use point-to-point microwave transmission systems for mobile backhaul.