Telecommunications Infrastructure Archives

Conditions improved in the second half, but overall, it was a challenging year for the telecom suppliers. Preliminary findings suggest 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 11% year-over-year (YoY) in 2024, recording the steepest annual decline in more than 20 years (decline was >20% in 2002), propelling total equipment revenue to fall by 14% over the past two years. This remarkable output deceleration was broad-based across the telecom segments and driven by multiple factors, including excess inventory, challenging macro environment, and difficult 5G comparisons.

In 4Q24, stabilization was driven by growth in North America and EMEA, which nearly offset constrained demand in Asia Pacific (including China).

The full-year decline was uneven across the six telecom programs. Optical Transport, SP Routers, and RAN saw double-digit contractions, collectively shrinking by 14% in 2024. Microwave Transport and MCN experienced a more moderate combined decline in the low single digits, while Broadband Access revenues were fairly stable.

Similarly, regional developments were mixed in 2024. While the slowdown was felt across the five regions — North America, EMEA, Asia Pacific, China, and CALA — the deceleration was more pronounced in the broader Asia Pacific region, reflecting challenging conditions in China and Asia Pacific outside of China.

Supplier rankings were mostly unchanged globally, while revenue shares shifted slightly as both Huawei and Ericsson positions improved. Overall market concentration was stable with the 8 suppliers comprising around ~80% of the worldwide market in 2024.

Rankings changed outside of China. Initial estimates suggest Huawei passed Nokia to become the #1 supplier, followed by Nokia and Ericsson. Huawei’s revenue share outside of China was up 2 to 3 percentage points in 2024, relative to 2021, while Ericsson is down roughly two percentage points over the same period/region.

Market conditions are expected to stabilize in 2025 on an aggregated basis, though it will still be a challenging year. The analyst team is collectively forecasting global telecom equipment revenues across the six programs to stay flat.

It was an intense week in Barcelona. After 50+ meetings during and before the event, below are some initial key takeaways.

RAN outlook remains tepid
Open RAN marketing is morphing
Vendor concentration will likely increase
Near-term AI RAN driven by cost efficiencies and performance improvements

Somber RAN Outlook

The RAN forecast remains unchanged, but downside risks persist. One of our primary objectives was to assess whether the 0% CAGR RAN forecast issued in January 2025 still holds. Our preliminary analysis indicates that our long-standing message remains valid—regional imbalances will continue to impact the RAN market in the near term, while the underlying fundamentals shaping the long-term trajectory will continue to exert pressure on the market.

Since RAN spending is constrained by capex, and capex is tied to operators’ revenue growth, the entire wireless industry is urgently seeking new revenue streams to break the cycle of increasing data consumption without corresponding increases in revenue. While we encountered numerous discussions and demos centered on charging premiums for guaranteed or enhanced performance, service providers recognize the difference between monetizing “fun” content and business-critical applications. For example, Uber may be willing to pay extra at airports to ensure timely pings for its users. However, expectations remain low for consumers to pay extra for faster video uploads from congested areas or an improved gaming experience. While AI may drive the development of new applications and content, it is unlikely to fundamentally change consumers’ willingness to pay for “fun” content.

With limited justification for revising carrier topline growth expectations, the focus remains on mobile data traffic growth and performance differentiation. Video accounts for approximately three-fourths of total mobile traffic but still represents a small fraction of the total time users spend streaming on cellular networks. As mobile data traffic growth slows, the industry is increasingly looking for a new device that could shift user behavior and, ultimately, increase video consumption. While a future dominated by smart glasses—where data is continuously recorded and uploaded—would present significant network challenges, we have to spread out the probabilities of any new device for the masses gaining traction.

The general sentiment from the event is clear: the slowdown in data traffic growth, combined with ongoing struggles to monetize consumer connectivity, remains a significant challenge. In this post-peak 5G rollout environment, even flat RAN projections are seen as an optimistic.

Open RAN Losing Marketing Steam

Open RAN is happening (>67% of Ericsson’s 2025 deliveries will be Open RAN prepared), but its marketing power is fading. Incumbent RAN suppliers prefer the Cloud RAN term, while the smaller suppliers are starting to look past Open RAN. Whether this is because the commonly used HHI (Herfindahl Hirshman Index) market concentration gauge was similar in 2024 as in 2018 when the O-RAN Alliance was formed, the original Open RAN multi-vendor vision is morphing, the entire RAN equipment market is down around $9 B, RAN outlook is flat, or the smaller suppliers are tired of waiting for larger Tier1 multi-vendor projects, the outcome is the same – the meaning of Open RAN is changing and marketing departments are aware (multiple suppliers are now looking to shift the message/focus).

In our 5-year forecasts, we track and show Open RAN, vRAN, Cloud-RAN, and multi-vendor RAN. However, our 10-year outlook consolidates the tracking/terms and only shows Cloud RAN.

Vendor Concentration Expected to Increase

Open RAN and Cloud RAN are unlikely to alter the long-term RAN concentration trajectory. After improving between 2020 and 2022—partly due to Open RAN adoption and market share shifts among the top five suppliers—the RAN HHI index rebounded in 2024. While we do not forecast HHI, historical trends suggest that market concentration is on the rise.

Although history is not always the best predictor of future outcomes, several factors indicate that a highly concentrated RAN market by 2030 is a strong possibility. These include recent RAN market developments, the scale required to sustain a competitive RAN portfolio, the ratio of greenfield to brownfield deployments (including FWA, enterprise 5G, and MBB), the challenges faced by smaller suppliers, and ongoing discussions about potential M&A activity.

AI RAN — Performance and Efficiency Gains in the Driver Seat

The use of intelligence in the RAN is not new—both 4G and 5G deployments rely heavily on automation and intelligence to replace manual tasks, manage increasing complexity, enhance performance, and control costs. What is new, however, is the rapid proliferation of AI in both consumer and enterprise domains, along with a shifting mindset toward leveraging AI in cellular networks. More importantly, the scope of AI’s role is expanding, with operators now looking beyond efficiency gains and performance improvements, cautiously exploring whether AI could also unlock new revenue streams.

Given the growing interest in AI RAN, it is no surprise that definitions and interpretations of AI vary across the industry. As the ecosystem gains a deeper understanding of AI’s value in RAN, definitions and expectations will likely continue to evolve.

Currently, the industry’s broader perspective aligns with the AI RAN vision outlined by the AI-RAN Alliance. At a high level, AI is expected to add value in three key areas: asset utilization, application growth, and RAN efficiency improvements. From an operator’s standpoint, AI offers the potential to either boost revenue or reduce capex and opex.

One of the observations in Barcelona was that near-term AI activity is primarily focused on cost savings and efficiency rather than topline growth. For example, China Mobile reported a 30% reduction in MTTR using AI-based O&M, Verizon shared field data indicating a 15% cost savings with Samsung’s AI-powered energy savings manager (AI-ESM), and an Ericsson AI-RAN demo at MWC demonstrated a 20% increase in throughput using AI to optimize performance in non-ideal radio conditions. Similarly, T-Mobile is evaluating how its collaboration with Nokia on AI-RAN can enhance network performance and efficiency.

With revenue growth stagnating, operators are exploring new revenue streams, showing interest in NVIDIA’s latest edge computing initiatives. However, they are also keenly aware of power, energy, and cost constraints at the cell site. The macro-RAN market, valued at approximately $30 billion, supports 1 to 2 million base stations annually, leaving little flexibility in DU pricing. For vRAN to compete with purpose-built RAN, server and acceleration costs must decrease rather than increase. While a GPU-driven RAN-only business model currently has limited viability, the potential for multi-purpose RAN supporting both RAN and non-RAN workloads presents a larger TAM.

That said, our overall impression is that the AI service provider (AI SP) vision—where carriers sell unused AI capacity at scale—remains somewhat farfetched for now. However, as costs and energy consumption decrease, the concept could have more potential in the future.

In short, it was another eventful show in Barcelona with a reasonable balance between hype and reality, perhaps because the RAN market is down nearly $9 B and the outlook remains tepid. Still, the event was also a reminder that there is a lot of innovation and activity underneath the flat topline trajectory. We did not cover all the MWC topics in this blog, but we will likely share more updates in the future.

Announcement Roundup: CommScope, Cisco, Juniper, and Extreme are gearing up for growth in 2025

The past few months have seen a flurry of vendor announcements. Mobile World Congress (MWC) is looming, and while the conference has traditionally been centered on the telecommunications ecosystem, this year even enterprise networking vendors are under pressure to reveal the next generation products that will be showcased in MWC Barcelona.

After a Slow Start, Wi-Fi 7 hits mainstream and should have a “trickle-up” effect

It feels like ages since the first enterprise class Wi-Fi 7 Access Point (AP) was commercialized in 2Q23. A quick analysis shows that indeed, enterprise Wi-Fi 7 AP introductions have been slightly slower than previous Wi-Fi technologies. It took a full year (4 quarters in the diagram below) for a critical mass of seven vendors to commercialize a Wi-Fi 7 AP for enterprises.

Unlike past versions of WLAN (Wireless Local Area Network), the early Wi-Fi 7 market has been dominated by vendors from China. H3C took an early lead in commercializing the first Wi-Fi 7 AP and in 2024, Huawei shipped the lion’s share of the new technology.

However, over the past few months, a larger portfolio of Wi-Fi 7 APs has become available worldwide. More Wi-Fi 7 APs are supporting the full 6 GHz frequency band, and these APs are power-hungry. As enterprises plan to upgrade their WLAN, they are looking carefully at the LAN infrastructure to determine whether it has the capacity and power available to drive a fully functional Wi-Fi 7 network. Recent vendor announcements aim to address the upcoming opportunities:

On February 24^th, CommScope announced the deepening of their collaboration with Nokia to deliver an optical LAN-driven Wi-Fi 7 network. This partnership involves the integration of Nokia’s OLT into CommScope’s RUCKUS One platform. CommScope commercialized the first RUCKUS Wi-Fi 7 AP back in December 2023, so this solution is ideal for organizations looking for the savings and performance of a fiber LAN coupled with the latest Wi-Fi technology.
Cisco slipped the announcement of its 9172 and 9172H Wi-Fi 7 APs (the 2^nd and 3^rd in the Cisco portfolio) into the Cisco Live EMEA conference in February. Along with the APs, came the announcement of a new Meraki switch, the MS150. This is a cloud-managed multi gig switch, with 60W of PoE ++ to feed those hungry Wi-Fi 7 APs. Cisco is now delivering each Wi-Fi 7 AP in a single worldwide SKU, meaning that global organizations no longer have the complex task of managing inventory by country. The APs can be controlled and managed by a Catalyst controller or can be cloud-managed with the Meraki dashboard.
Also in February, Juniper introduced a new Campus Switch: the fixed form factor EX4000. It is also designed for customers wishing to increase PoE to their LAN, with a PoE budget of 960W. Juniper indicates that the switch is quick to boot (under 2 minutes) and comes with an Intelligent Energy feature which can automatically adjust fan speed and de-activate PoE when ports are not in use.

Announcements start with A (and end with “I”)

Wi-Fi 7’s higher performance comes at the cost of higher management complexity. Fortunately, more
AI-driven network operations features are becoming available, offering an early opportunity for enterprises to use AI to benefit their bottom lines. Three recent vendor announcements target the AIOps opportunity for enterprises:

CommScope’s February announcement highlights new AI features on RUCKUS One, the company’s network assurance platform. For instance, IntentAI^TM attaches network configurations to business outcomes, and EquiFlex^TM promises to boost network capacity by reducing congestion in high-density environments.
At Cisco Live EMEA in Amsterdam, Cisco announced new AIOps enhancements in Meraki (AI Assistant for trouble shooting) and an updated Wi-Fi 7 Radio Resource Management feature that uses an AI engine to more intelligently optimize radio configurations.
With 3 million devices managed in Extreme’s cloud, there is a sizeable potential for the company to offer enterprises advanced AIOps features. In December, Extreme announced Platform ONE, which will deliver an automated experience throughout a customer’s lifecycle. This means that as well as supporting configuration and anomaly detection, it will deliver business functions such as asset management, contract analysis and personalized analytics. In February, Extreme announced the platform would be available for its Managed Service Provider partners. Platform ONE will support Extreme’s portfolio of campus and WAN networking equipment and will be generally available in the second half of 2025. Extreme’s Wi-Fi 7 APs have been shipping since June 2024 and Platform ONE promises that WLAN can be configured in one-click, simplifying impending upgrades.

We are on the doorstep of accelerated Wi-Fi 7 adoption, and arguably, this upgrade will have the biggest impact on the Local Area Network since Wi-Fi was first introduced to the enterprise. 2024 was a difficult year for enterprise networking vendors, with plummeting orders and contracting revenues. Now, the industry digestion period is coming to an end, and enterprises must upgrade their LAN equipment if they want to stay competitive. Things are looking up for the 2025 campus networking market.

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).

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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