Dell’Oro bumps revenue forecast 50% as open RAN gains steam

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Dell'Oro now believes cumulative open RAN revenue from 2020 to 2025 could soar as high as $15 billion. (Getty Images)

Dell’Oro Group raised its open RAN revenue forecast by 50%, citing strong momentum behind the technology in the first half of 2021.

The analyst firm previously predicted cumulative open RAN revenue from 2020 to 2025 would hit as much as $10 billion. It now believes the figure could soar as high as $15 billion, with open RAN revenues accounting for more than 10% of the overall RAN market by 2025. The latter figure would mark an increase from open RAN’s expected 1% to 2% share of the market in 2021.

Stefan Pongratz, Dell’Oro Group VP and analyst, noted in May there was a five-fold jump in open RAN revenue in Q1 2021. He told Fierce on Friday momentum behind the technology has continued to grow.

“The market is coming in at a faster pace than expected, especially in the APAC region, underpinned by a fairly rapid transition from proprietary RAN towards 5G Open RAN,” he said. “In addition, feedback from the suppliers suggest the pipeline is improving. This combined with the increased likelihood that more operators will demand their suppliers support the O-RAN specification forms the basis for the improved market sentiment and more favorable outlook.”

RELATED: Open RAN revenue skyrockets in Q1, tipped to double in 2021

Earlier this week, Nokia announced it is pausing its work with the O-RAN Alliance due to concerns about collaborating with companies which were recently placed on the U.S. Entity List. Ericsson subsequently warned worries about working with such companies could “hamper progress within the O-RAN Alliance.”

Asked about whether the situation was likely to hinder deployments, Pongratz noted the “open RAN movement is fairly broad-based and robust.” While speed bumps along the way are “always expected,” he concluded “it is unlikely that these derailments will be enough to impact the overall trajectory of the movement.”

RELATED: Nokia’s pause sends jolt through O-RAN community

Pongratz also weighed in on the role supply chain issues might play, stating that “for now, it appears that the majority of the suppliers have for the most part been able to manage when it comes to the broader infrastructure areas, including RAN.”

In terms of how the open RAN vendor landscape is shaping up, Pongratz said the mix between incumbent RAN players and new challengers with smaller share is “relatively healthy at this juncture, with smaller RAN suppliers including Airspan, Altiostar, Fujitsu, Mavenir, NEC, and Parallel Wireless accounting for the majority of the Open RAN revenues in 1H21.” But he added traditional RAN suppliers are also well-positioned to succeed in the market and “we expect they will play a pivotal role going forward.”