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Mobile infrastructure investments slowed significantly in 2024. Preliminary findings indicate that the Radio Access Network (RAN) market contracted by 10 to 20% year-over-year (YoY) during the 1Q24 to 3Q24 period (final 4Q24 and full-year data expected around mid-February). Several factors contributed to this decline. First and foremost, the state of 5G coverage is impacting the market. According to Ericsson’s latest Mobility Report, 5G now covers approximately 55% of the global population. While the 5G macro-installed base is only halfway complete, macro shipment deployment growth is decelerating as year-over-year comparisons become increasingly challenging.

Also weighing on the capex is the disconnect between supply and demand. In the early days of 4G, mobile data traffic doubled annually, and limited bandwidths accelerated the transition to LTE-Advanced. In contrast, 5G deployments in the upper mid-band deliver a substantial capacity boost—sometimes more than doubling overall capacity. Combined with slower mobile data traffic growth, this has delayed the need for additional capacity-related investments.

In addition, the operators are struggling to monetize 5G beyond the known MBB use case scenarios. As a result, they are adopting a more cautious approach when balancing investments in maintaining existing services and exploring new applications.

These broader trends are not surprising. Heading into 2024, global RAN revenues were anticipated to decline at a mid-single-digit rate. However, with RAN on track to decline at a double-digit rate, it is evident that even though our predictions were correct directionally, we underestimated the scale of pullbacks in markets like Japan, India, and China. For instance, India and China were projected to decline by 30–50% and 5%, respectively, but initial results suggest the market is coming in below expectations.

Although market conditions showed signs of improvement in 3Q24, the overall state of the RAN market remains subdued. Looking ahead to 2025, the critical question is how this ongoing downturn will affect the broader RAN market and its sub-segments.

RAN conditions will improve in 2025

After two years of sharp declines, during which global RAN revenues fell by approximately 20% compared to 2022, we are cautiously optimistic about potential stabilization in 2025. Although the underlying drivers shaping the RAN market—slower 5G coverage expansion, postponed data traffic investments, and ongoing monetization challenges—are unlikely to change, regional variations are expected to be more favorable this year. Improved conditions in India, Japan, and North America may provide some relief, although reduced 5G activity in China will continue to exert downward pressure on the market. RAN revenues are projected to hold fairly steady globally and advance by 5% to 10%, excluding China.

Private wireless will grow >20%

Preliminary estimates indicate that private wireless is expanding at a healthy rate, aligning closely with the projections outlined a year ago. Growth is expected to reach 20% to 30% in 2024, slightly lower than the ~40% growth recorded in 2023. Nevertheless, private 5G remains in its early stages within the broader enterprise landscape, and it will take time for private RAN to secure a more substantial share of the overall RAN market.

Looking ahead, we forecast private wireless RAN revenues to grow by over 20% in 2025, driven by robust industrial adoption. Manufacturing emerged as the largest vertical in 2024, and based on current visibility, it is likely to retain its leading position this year.

Contract activity will lag revenues. According to the GSA database, the total number of GSA private wireless customer references reached 1603 in 3Q24, up 8% Q/Q and 25% Y/Y. Although the market is slowing based on this metric, this is also not a major cause of concern. Both operators and suppliers agree that the quality of the contracts is improving as deals are progressing beyond the PoC phase and increasingly include larger, multi-site, and even multi-country agreements, reflecting the shift from local to global deployments. In addition to the improved reach, the overall deal value is advancing significantly as the equipment suppliers/operators move away from selling just private wireless and instead sell connectivity with bundles (edge, apps, services, etc).

 

Open RAN to account for 5% to 10% of RAN

Open RAN revenues came in weaker than expected in 2024. Our latest report findings show worldwide Open RAN revenues are down 30% YoY over the first three quarters (vRAN revs are down 15% over the same period). While the leading RAN vendors outside of China are embracing most of the pillars shaping the Open RAN movement, the transition from a commercial perspective will be an evolution.

As a reminder, Open RAN investments accelerated rapidly in the initial phase between 2019 and 2022. Open RAN-based investments then declined in 2023 as activity in the US slowed. Market conditions remain challenging in 2024, and helping to explain the 30 % YoY decline for the 1Q24-3Q24 period is the state of the 5G market in Japan and the US combined with the commercial readiness of next-generation O-RAN ULPI interfaces.

Still, these speed bumps are not expected to derail the long-term trajectory. Short-term visibility is more uncertain, however. Even so, we are forecasting Open RAN revenues to grow in 2025, accounting for 5% to 10% of total RAN revenues (single-vendor Open RAN > multi-vendor Open RAN).

Dedicated FWA RAN < $1B

The market opportunity for DSL and fiber replacements or alternative solutions is vast. According to the ITU and Ericsson’s Mobility Report, approximately 35% of the world’s two billion households remain underserved, lacking broadband connectivity. Beyond these unconnected households, FWA technologies can also address the needs of secondary homes and small businesses. With nearly half of 5G operators supporting 5G FWA (GSA), fixed wireless is already a mature technology, boosting both the RAN and the broadband markets.

Despite these advancements, the fundamental economics driving FWA are not expected to shift significantly in 2025. While technological improvements are expanding the TAM, the business case remains constrained by the mobile network’s capacity and the ROI of dedicated FWA RAN deployments. Operators continue refining their targets, but the existing mobile network infrastructure offers the most favorable RAN economics.

Although operators are gradually increasing their investments in dedicated RAN solutions for high-traffic areas, mobile networks are expected to maintain dominance in the near term. According to our latest FWA report, which covers the broader FWA ecosystem—including 3GPP and non-3GPP RAN and devices—dedicated FWA RAN investments are projected to stay below $1 billion in 2025.

Market concentration to remain stable/increase

RAN remains a concentrated market, with the top 5 RAN suppliers accounting for 94% to 95% of the 1Q24-3Q24 RAN revenues. New technologies, architectures, and segments can, in some cases, present opportunities and attract vendors with smaller footprints.

Based on current visibility in the existing MBB market and expectations for new private 5G and dedicated FWA opportunities, which are likely to have a higher greenfield/brownfield ratio, we don’t expect any significant movement in the split between the top 5 and the Other suppliers.

In summary, conditions will improve in 2025, but it will still be another underwhelming year for the broader RAN ecosystem, characterized by challenging fundamentals. Nevertheless, certain sub-segments and regions are poised to perform well. As always, the competitive dynamics within the RAN market will remain intense. Please follow us and keep us honest as we monitor progress throughout 2025 (AI RAN and 6G will be discussed in separate updates).

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We just wrapped up the 3Q24 reporting period. And per our latest RAN findings, 2024 is so far not a great year from an Open RAN revenue perspective. As a reminder, Open RAN investments accelerated at a torrid pace between 2019 and 2022. This remarkable ascent was then followed by a ~$0.5 B decline in 2023 as activity in the US slowed. Market conditions remain challenging in 2024, and helping to explain the 30 % year-over-year (Y/Y) decline for the 1Q24-3Q24 period is the state of the 5G market in Japan and the US combined with the commercial readiness of next-generation O-RAN ULPI technologies.

In other words, the long-term trajectory is positive, but the short-term picture remains blurry. With large-scale greenfield deployments now mostly in the past, the broader market sentiment will remain uncertain until 5G activity in the US/Japan improves or modernization projects utilizing the latest O-RAN ULPI interfaces firm up.

Additional Open RAN highlights from the 3Q2024 RAN Report:

  • Virtualized RAN is down 15 % Y/Y for the 1Q24-3Q24 period.
  • The top 3 Open RAN suppliers for the 1Q24-3Q24 period based on worldwide revenues are Samsung, NEC, and Fujitsu.
  • The top 3 vRAN suppliers for the 1Q24-3Q24 period based on worldwide revenues are Samsung, Fujitsu, and Ericsson.
  • Short-term projections have been revised downward, while the long-term outlook remains unchanged. Open RAN is now projected to comprise a mid-single-digit share of the 2024 RAN market and 8 to 10 % of the combined proprietary plus Open RAN 2025 revenues.

About the Report

Dell’Oro Group’s RAN Quarterly Report offers a complete overview of the RAN industry, with tables covering manufacturers’ and market revenue for multiple RAN segments, including 5G NR Sub-7 GHz, 5G NR mmWave, LTE, macro base stations and radios, small cells, Massive MIMO, Open RAN, and vRAN. The report also tracks the RAN market by region and includes a four-quarter outlook. To purchase this report, please contact us by email at dgsales@delloro.com.

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The slump that shaped the second half of 2023 extended into the first half of 2024. Preliminary findings indicate that worldwide telecom equipment revenues across the six telecom programs tracked at Dell’Oro Group—Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch—declined 16% year-over-year (Y/Y) in 2Q24, recording a fourth consecutive quarter of double-digit contractions. Helping to explain the abysmal results are excess inventory, weaker demand in China, challenging 5G comparisons, and elevated uncertainty.

Regional output deceleration was broad-based in the second quarter of 2024, reflecting slower revenue growth on a Y/Y basis in all regions, including North America, EMEA, Asia Pacific, and CALA (Caribbean and Latin America). Varied momentum in activity in the first half was particularly significant in China – the total telecom equipment market in China stumbled in the second quarter, declining 17% Y/Y.

The downward pressure was not confined to a specific technology, and initial readings show that all six telecom programs declined in the second quarter. In addition to the wireless programs (RAN and MCN), which are still impacted by slower 5G deployments, spending on SP Routers fell by a third in 2Q24.

Supplier rankings were mostly unchanged. The top 7 suppliers in 1H24 accounted for 80% of the worldwide telecom equipment market and included Huawei, Nokia, Ericsson, ZTE, Cisco, Ciena, and Samsung. Huawei and ZTE combined gained nearly 3 percentage points of share between 2023 and 1H24.

Supplier positions differ slightly when we exclude the Chinese market. Even with the ongoing efforts by the US government to curb Huawei’s rise, Huawei is still well positioned in the broader telecom equipment market, excluding China, which is up roughly two percentage points relative to 2019 levels.

Even with the second half expected to account for 54% of full-year revenues, market conditions are expected to remain challenging in 2024. The analyst team collectively forecasts global telecom equipment revenues to contract 8 to 10% in 2024, down from the 4% decline in 2023.

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5G RAN revenues accelerated rapidly between 2018 and 2022, propelling 5G RAN to account for around two-thirds of total 3G-5G RAN before stabilizing in 2023. With the pace of 5G construction now slowing, partly due to more challenging comparisons in advanced MBB markets, it’s important to note that growth prospects for FDD and TDD are not the same. TDD dominated investments in the first phase as operators focused on capitalizing on the larger channel bandwidths available in the upper mid-band. The mix between Sub-6 GHz FDD and TDD is expected to evolve going forward as FDD growth outpaces TDD.

While the upper mid-band offers large bandwidths of unoccupied contiguous spectrum, the combined FDD assets in the sub-3 GHz bands are significant. The amount of spectrum varies depending on the market. However, FDD generally provides around 100 MHz of combined uplink and downlink bandwidth when adding up the paired 600, 700, 800, 900, 1.4, 1.8, 2.1, and 2.6 GHz bands. Even if the spectral efficiency upside between 4G and 5G is limited, especially in non-massive MIMO configurations, FDD still comprises approximately a third to a half of the overall sub-6 GHz spectrum. In other words, sub-3 GHz deployments will play a growing role in the broader 5G roadmap as most 4G FDD spectrum will eventually become 5G.

Operators initially tend to focus on the upper mid-band before complementing it with narrow-band FDD deployments. However, results from 5G NR FDD-only deployments suggest that this spectrum holds significant potential. For example, in the Netherlands, the delay in C-band spectrum provisioning prompted local operators to optimize the use of existing assets, coordinating 4G and 5G technologies across high and low FDD bands to create a high-performance network. Umlaut testing has shown impressive average data rates and latency results in the Netherlands even with the C-Band delays.

In addition to the combined spectral resources in the sub-3 GHz bands, another major benefit is the improved RF propagation characteristics. The inversely proportional relationship between wavelengths and carrier frequencies means that the lower sub-3 GHz frequencies enhance coverage in rural areas, improve in-building performance, and elevate the uplink experience.

The situation is complicated by the small bandwidths scattered across multiple discrete bands, increasingly crowded and complex sites, challenging antenna form factors, and slowing physical cell site growth. At the same time, innovation is on the rise to tackle some of these challenges.

Site simplification is a top priority. Wideband technology enables multi-band deployments within a single radio, supporting both spectrum and power resource pooling. Most leading suppliers now offer multiband/wideband radios and antennas, which facilitate more compact site designs, simplify installation, and accelerate time to market. Some of the latest multiband radios can support three bands in a single device, and in some cases, they use just one PA (power amplifier) and filter, which helps reduce the radio’s form factor, weight, and power consumption.

Source: Huawei

 

Source: Nokia

 

Massive MIMO is not expected to play the same role with FDD as it did with TDD, in part because the 8T8R business case is more compelling in these bands. Even so, continued antenna innovation, combined with advancements in beamforming technology, will help boost the reach of higher-order and Massive MIMO in the FDD bands.

According to Huawei, intelligent beamforming combined with multi-band serving cell (MBSC) can potentially raise the overall FDD capacity and throughput by about 10x, relative to 4T4R.

5G Carrier Aggregation (CA) investments have been minimal to date but are projected to play a greater role in the future as operators expand the use of the sub-3 GHz spectrum. In addition to the potential for multi-Gbit data rates, operators can extend the mid-band range by aggregating low-band FDD carriers. For example, Elisa overcame uplink limitations in the upper mid-band by aggregating its C-band holdings with the 700 MHz carrier, which also enabled Elisa to double 5G throughputs at the cell edge (Nokia/Elisa case study).

Ericsson and T-Mobile recently demonstrated 3.6 Gbps speeds using 245 MHz of aggregated FDD and TDD spectrum. Additionally, Dish and Samsung showcased peak speeds of 1.3 Gbps using 75 MHz of FDD spectrum across three FDD bands.

In our latest 5G RAN forecast, we model FDD-based macro-RAN revenues to accelerate faster than the more mature TDD-based 5G RAN market, partly due to advancements in the 3GPP Release 17/18 specification paving the way for continuous high-bandwidth FDD deployments and multi-band FDD+TDD CA. The forecast rests on the assumption that the 8T8R gains relative to 2T2R/4T4R are sufficient to justify substantial 8T8R deployments (>20%). The future of FDD Massive MIMO looks positive, though the business case will be more limited compared to upper mid-band TDD Massive MIMO.

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After five consecutive years of growth and stable trends in 1H23, the pendulum swung rapidly towards the negative in the second half of the year. Preliminary findings suggest that worldwide telecom equipment revenues across the six telecom programs tracked at the Dell’Oro Group – Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch – declined 5% year-over-year (YoY) for the full year 2023, performing worse than expected.

There are multiple forces at play. First and foremost, challenging comparisons in some of the advanced 5G markets with higher 5G population coverage taken together with the slow transition towards 5G SA helped to partially explain steep declines in wireless-based investments. This capex deceleration was not confined to the RAN and MCN segments. Following a couple of years of robust PON investments, operators were able to curtail their home broadband capex as well. This reduction was more than enough to offset positive developments with optical transport and SP routers.

North America subsided faster than expected. Initial readings show that the aggregate telecom equipment market dropped by roughly a fifth in the North America region, underpinned by weak activity in both RAN and Broadband Access. On the bright side, regional dynamics were more favorable outside of the US. Our assessment is that worldwide revenues excluding North America advanced in 2023, as positive developments in the Asia Pacific region were mostly sufficient to offset weaker growth across Europe.

Also contributing to the regional and technology trends is the disruption caused by Covid hoarding and the supply chain crisis. Although this inventory correction was not felt everywhere and varied across the telecom segments, it was more notable in the RAN this past year.

Renewed concerns about macroeconomic conditions, Forex, and higher borrowing costs are also weighing down prospects for growth. The gains in the USD against the Yuan and the Yen are impacting USD-based equipment revenue estimates in China and Japan.

Supplier rankings were mostly unchanged; however, vendor revenue shares shifted slightly in 2023. Still, the overall concentration has not changed – the top 7 suppliers accounted for around 80% of the overall market. One major theme across the various telecom programs is that despite ongoing efforts by the US government to limit Huawei’s addressable market and access to the latest silicon, Huawei still maintains its position as the global telecom equipment leader. In fact, our assessment is that Huawei’s lead widened in 2023, in part because its limited exposure to the North America region was a benefit in 2023 on a relative basis.

Market conditions are expected to remain challenging in 2024, though the decline is projected to be less severe than in 2023. The analyst team is collectively forecasting global telecom equipment revenues to contract 0 to -5% in 2024. Risks are broadly balanced. In addition to currency fluctuations, economic uncertainty, and inventory normalization, there are multiple regions/technology segments that are operating in a non-steady state.