Dell’Oro expects RAN market to grow 10-15% in 2021

5G space globe
Moving from 4G to 5G is the primary driver for propelling the market to six consecutive quarters of year-over-year growth. (Getty Images)

The radio access network (RAN) market continued to grow in the second quarter despite obstacles like the global pandemic, supply chain shortages and export restrictions, according to Dell’Oro Group.

Based on preliminary findings, the RAN market operated at elevated levels during the second quarter, the research firm noted. That means it’s on track to reach cumulative global RAN investments of about $240 billion in the 2020-2025 forecast period.

The transition from 4G to 5G is the primary driver of the positive momentum that’s propelling the market to six consecutive quarters of year-over-year growth and the upward revision for the full-year 2021, said Stefan Pongratz, VP and analyst with Dell’Oro Group. He also cited new fixed wireless access (FWA) and enterprise capex, as well as transitions toward active antenna systems.

Total RAN is now projected to advance 10% to 15% in 2021.

RELATED: RAN market smashes expectations in 2020: Dell’Oro

Pongratz told Fierce that the improved market sentiment was fairly broad-based, with multiple regions now expanding and improving their respective mobile broadband footprints. “With the improved outcome in Latin America, we estimate that four out of the six regions we track increased at a double-digit rate in the second quarter,” he said via email.

Things are moving slowly but surely for the open RAN market, which by design consists of a lot of newer players. Dell’Oro estimates the combined share of the smaller RAN suppliers, excluding the top five vendors, did improve by around one percentage point between 2020 and the first half of 2021, in part as a result of the ongoing open RAN greenfield deployments in Japan and the U.S.

Still, “it is all relative and it will take some time before open RAN moves the needle,” he said.

For the big players, RAN rankings didn’t change in the second quarter. Huawei and ZTE were the No. 1 and No. 2 suppliers in China, while Ericsson and Nokia dominated the No. 1 and 2 positions outside of China. Preliminary estimates suggest that Ericsson and Samsung recorded revenue gains outside China, while Huawei and ZTE improved their positions in China.

RELATED: Nokia highlights turnaround with new 5G RAN gear

Nokia’s RAN-related turnaround efforts continued to move in the right direction, supported by performance and cost improvements to its RAN portfolio, Pongratz said.

“Despite the expected share losses in the North America region, we estimate that Nokia’s RAN revenues increased in the quarter, marking a fourth consecutive quarter of Y/Y gains," he said. "At the same time, preliminary findings suggest its revenue share outside of China was impacted negatively in the first half relative to 2020."