Momentum in the RAN market is ‘losing some steam’

According to a report by analyst outfit Dell’Oro Group, the overall 2G-5G RAN infrastructure equipment market declined in the second quarter.

Dell’Oro reckons ‘preliminary’ findings suggest that positive momentum in the Radio Access Network (RAN) market over the past four years is ‘losing some steam.’ The overall 2G-5G RAN infrastructure equipment market, which included hardware and software, declined in the second quarter, recording the first YoY contraction in more than two years.

It’s also apparently the third consecutive quarter in which the performance of the RAN came in below expectations. Dell’Oro said that while the RAN market is not immune to external risks, initial readings suggest that the impact of deteriorating macro conditions, high levels of inflation, and supply chain disruptions were limited in the quarter – which appears to mean its not about the wider economic and logistical turmoil the world is currently grimacing through.

“The shift in the pendulum is not a surprise, but admittedly it has swung a bit faster toward the negative than initially expected”, said Stefan Pongratz, Vice President at Dell’Oro Group. “Slower momentum is not a sign that the 5G deployment phase is over. The message we have communicated for some time now, namely that the 5G cycle will be longer than previous technology cycles, still holds. At the same time, market conditions in the quarter were impacted by APAC excluding China, Russia, and foreign exchange.”

Elsewhere the data lists Huawei, Ericsson, Nokia, ZTE, and Samsung as the top five suppliers in the quarter, while outside of China the top four were Ericsson, Nokia, Huawei, and Samsung.

Huawei and ZTE continued to be the major players in China, unsurprisingly, and together they accounted for 90-95% of RAN revenue in H1. Outside of China, Ericsson accounted for for 39% of the revenues in H1, while we’re also told (rather vaguely) that Nokia’s RAN position outside of China improved between 1Q and 2Q 2022. Elsewhere, Samsung’s 1H 2022 RAN share improved both in North America and globally.

Dell’Oro goes on to stipulate that even though RAN results ‘disappointed’ in the quarter and H1 revenues are tracking below expectations, it is still projected to record growth in 2022, which would be the fifth consecutive year it has achieved that.

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