Worldwide RAN revenues are projected to reach $200 billion over the 2019-2024 forecast period, driven by the surging demand for 5G, according to Dell’Oro Group.
It’s not the first time the market research firm has pointed to the upswing in the RAN market. Last fall, it noted that 5G NR demand propelled the RAN market in the third quarter of 2019 to a fifth consecutive quarter of year-over-year growth—for the first time in over a decade.
“Following three consecutive years of declining worldwide RAN revenues between 2015 and 2017, the global upswing that began in the second half of 2018 has become deeper and stronger, reflecting a shift from 4G to 5G that is accelerating at a torrid pace, much faster than anyone expected,” said Dell’Oro Group analyst Stefan Pongratz in today’s press release.
The firm expects these trends to propel the overall RAN market to advance at a healthy pace over the near term, accommodating an intense 5G capex situation before growth tapers off in the outer part of the forecast period, resulting in a flat compound annual growth rate (CAGR) between 2019 and 2024.
The main growth drivers include a condensed 5G Mobile Broadband deployment phase, new capex to address new opportunities with IoT/private wireless/fixed wireless access (FWA) and some capex migration from the antenna manufacturers to the RAN suppliers, to accommodate the shift toward advanced antenna systems, Pongratz told FierceWirelessTech via email.
“While capex/revenues will not deviate too much from historical trends over time, there will be some upside in the near-term to accelerate 5G rollouts and this is a significant driver of the favorable near-term outlook,” he said. “These projections rest on the assumption that the Asia Pacific (APAC) region will be one of the main growth vehicles, reflecting strong growth in China—average APAC RAN revenue over the forecast period is projected to go up by more than 20% relative to the average APAC RAN market over the 2010-2018 period.”
At the same time, the RAN outlook for the North America region is also favorable, relative to the LTE investments levels, with the average RAN capex in the North American region expected to be up more than 10% relative to 2010-2018 levels, he said.
The top three RAN vendors are Huawei, Ericsson, and Nokia, but upstarts are seeking to disrupt the market, with several different industry initiatives underway.
Last week, O2, the Telefonica-owned U.K. mobile operator, announced plans to introduce Open RAN technology into its network using smaller non-traditional vendors including Mavenir, DenseAir and WaveMobile. The company also said it anticipates commercial deployment of O-RAN to accelerate over the next 18-24 months.
Operators like O2 say they like the flexibility and cost-effectiveness associated with O-RAN, with open and software-defined network capabilities that enable operators to use multiple vendors and not be locked into a single supplier.