Global RAN spend accelerates but core spend slows – Dell’Oro

Telecoms analyst firm Dell’Oro has published fresh numbers that show global 5G SA investment is not keeping pace with the radio access network rollout.

Dell’Oro has once more upgraded its outlook for the total RAN market, now projecting it to grow 10-15% this year. Within that the company noted increasing Balkanisation, with Huawei and ZTE gaining share in China, and Ericsson and Nokia gaining elsewhere. It also reckons Ericsson and Samsung increased their revenue shares outside of China.

“The underlying long-term growth drivers have not changed and continue reflect the shift from 4G to 5G, new FWA and enterprise capex, and the transitions towards active antenna systems,” said Stefan Pongratz of Dell’Oro. “At the same time, a string of indicators suggest this output acceleration is still largely driven by the shift from 4G to 5G, which continued at a torrid pace in the quarter, even as LTE surprised on the upside.”

You’d think investment in RAN and core would be parallel but apparently not. Dell’Oro also reckons revenues for the Mobile Core Network (MCN) market slowed to 6% year-on-year growth in 2Q 2021 after four quarters of double-digit growth. This is apparently down non-Chinese operators hesitating before taking the plunge into standalone (SA) 5G.

“We attribute the slowdown to the slow uptake of 5G Standalone (SA) networks,” said David Bolan of Dell’Oro. “CSPs need to make decisions about which direction to take for 5G SA deployments. CSPs have several options to mull over, with new choices that were not available during the switch from 3G to 4G.

“One decision CSPs need to make is about the selection of Network Function Virtualization Infrastructure (NFVI). NFVI can be procured from a 5G core vendor, a third-party, the public cloud, or another platform like the Rakuten Communications Platform.”

It seems the virtualization era, while offering new tools and flexibility for operators, has also complicated the strategic environment regarding investment in the core. The existence of non-standalone 5G allows them to kick that decision down the road almost indefinitely and, it seems, most Western operators are opting to do just that.