The golden days of 5G are over in the U.S. and other mature 5G markets. According to research firm Dell’Oro Group, after five years of experiencing 40% to 50% growth in radio access network (RAN) revenues, the global RAN market is expected to decline at a compounded annual growth rate (CAGR) of 1% over the next five years.
Dell’Oro said that while it may still be the “early days” in the broader 5G journey, it is tough to balance the slow growth in more mature 5G markets with the parts of the world that are just starting to deploy 5G. According to Stefan Pongratz, VP at Dell’Oro, there just isn’t enough of a growth streak in the less mature 5G markets to make up the difference for the declines in the older 5G markets.
In addition, Pongratz said that new 5G revenue streams from services such as fixed wireless access (FWA) and 5G/LTE enterprise wireless are not ramping up fast enough to overcome the decline in the 5G RAN market. Plus, 5G Advanced is not expected to “trigger a new capex cycle.”
Dell’Oro added that while LTE is still handling the majority of the mobile data traffic, new RAN investments are in 5G. And while 5G is projected to grow another 20% to 30% by 2027, it will not be enough growth to offset the steep declines in LTE investments.
Because of this, Dell’Oro expects the global RAN market will decline over the next five years and the more developed 5G regions like North America and China will see the steepest declines.
6G holds the biggest promise for a turnaround in global RAN revenues. Pongratz said that the question now is, how much will the RAN market decline before 6G comes along?
Dell’Oro Group isn’t the only analyst firm painting a grim picture of the global RAN market. Mobile Experts released a report in February that said that 5G RAN investments will decline over the next few years until 6G ramps up.
Plus, this pattern isn’t unusual for the mobile industry. Every time the industry deploys a new generation of wireless technology, there is a decline in capex spending and a reduction in the RAN market.