RAN downturn predicted to continue through to 2028

Following the goldrush years between 2017 and 2021 in which the RAN market enjoyed a 40% to 50% increase, the RAN market is now in decline and Dell’Oro forecasts this to continue throughout its forecast period between 2024 and 2028.

Worldwide RAN revenues are projected to decline at a 2% CAGR over the next five years, as continued 5G investments are offset by ‘rapidly declining’ LTE revenues. However it expects this pace of the decline ‘should moderate somewhat after 2024.’

Regionally, the Asia Pacific region is expected to lead the decline, while ‘easier comparisons’ following steep contractions in 2023 will improve the growth prospects in North American. However North American RAN revenues are expected to remain ‘significantly lower’ relative to the peak in 2022.

Meanwhile 5G-Advanced is not expected to fuel another major capex cycle – operators will gradually transition their spending from 5G towards 5G-Advanced within their existing capex budgets, says Dell’Oro.

As a partial silver lining to all this, there are some RAN areas expected to grow over the next five years, such as 5G NR, FWA, mmWave, Open RAN, vRAN, private wireless, and small cells. But presumably not by enough to counter the general downward trend.

“It is not a surprise that there is rain after sunshine,” said Stefan Pongratz, Vice President for RAN market research at Dell’Oro Group. “In addition to MBB-based coverage-related challenges, this disconnect between mobile data traffic growth and the capacity boost provided by the mid-band, taken together with continued monetization uncertainty, is clearly weighing on the market.”

The predicted decline is not out of the blue – at the beginning of the year the analyst projected that RAN revenues would experience a CAGR decline of 1% over the next five years. However since it’s now predicting a 2% decline over that period, it appears the analyst is anticipating an even gloomier outlook than it foresaw in January.