The decline in the RAN market is expected to moderate after 2024, according to Dell’Oro
The global radio access network (RAN) market is forecast to decline at a compound annual rate of -2% during the 2024-2028 period as continued 5G investments will be offset by rapidly declining LTE revenues, according to new numbers by Dell’Oro Group.
The report pointed out that this expected decline follows the 40-50% increase in the RAN market between 2017 and 2021.
However, Dell’Oro noted that despite the challenging scenario for the RAN market, the pace of the decline should moderate somewhat after 2024.
“It is not a surprise that there is rain after sunshine,” said Stefan Pongratz, vice president for RAN market research at Dell’Oro Group. “In addition to [mobile broadband]-based coverage-related challenges, this disconnect between mobile data traffic growth and the capacity boost provided by the mid-band, taken together with continued monetization uncertainty, is clearly weighing on the market,” said Pongratz.
The Asia Pacific region is expected to lead the decline during the forecast period, while North American RAN revenues are expected to remain significantly lower than their peak in 2022.
According to Dell’Oro, 5G-Advanced 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, the research firm found.
Also, the report noted that the RAN segments that are expected to grow over the next five years include 5G New Radio, Fixed Wireless Access, millimter wave, Open RAN, vRAN, private wireless and small cells.
A previous forecast by Dell’Oro Group reported that the global mobile core network (MCN) market is expected to decline by 10% during the 2024-2028 period.
The reduction in the forecast is caused by severe economic headwinds, primarily the high inflation rates, and the slow adoption of 5G Standalone (5G SA) networks by mobile network operators (MNOs), according to Dell’Oro.
“It bears repeating, this is the fifth consecutive time we have reduced the growth rate of the MCN market as the build-out of 5G SA networks continue to wane compared to 5G NSA networks,” said Dave Bolan, research director at Dell’Oro Group. “This is the first 5-year forecast out of the last five where the 5-year CAGR has fallen into negative territory. The count of 5G SA networks commercially deployed by MNOs remains the same as it was at the end of 2023, about 50 5G SA networks.”
For the same reasons outlined for the MCN market, Dell’Oro reduced the 5-year cumulative revenue forecast for the Multi-Access Edge Computing (MEC) market, a sub-segment of the MCN market, by 18%.
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