Global RAN market grows despite pandemic, supply chain issues

The global pandemic and supply chain issues certainly have slowed things down. But the Dell’Oro Group believes the Radio Access Network (RAN) market will hit another year of growth in 2022.

“We have not made any major adjustments to the aggregate forecast and still expect the broader RAN market to record a fifth consecutive year of growth in 2022, underpinned by elevated investments in North America, Europe and China,” said Dell’Oro Group analyst Stefan Pongratz in a press release.

Preliminary findings suggest the positive momentum that characterized the RAN market over the past four years extended into the first quarter. That said, estimates also suggest that the overall 2G–5G RAN infrastructure equipment market—including hardware, software, and firmware—increased at the slowest pace in more than two years.

Regarding RAN growth for 2022, “risks remain balanced,” Pongratz told Fierce. “From a macro level, one of the key risks is that a weaker economy could eventually impact capex and RAN. Given that it typically takes six months to a year before the operators revise their capex, we don’t believe this is a major concern for 2022 at this juncture.”

This, taken together with the fact that fundamentals remain healthy and three regions are growing at a solid pace in the first quarter - including China, Europe, and North America – “forms the basis for the upbeat outlook,” he said.

It’s important to keep in mind that it’s still early days in the broader 5G cycle and fundamentals remain healthy, Pongratz said.

There’s no doubt that 5G is driving all the growth, he said. While the LTE network still addresses the lion’s share of global mobile data traffic, global LTE RAN revenues peaked in 2018 and are on track for a fourth consecutive year of declines in 2022, he said.

The top five suppliers in the quarter haven’t changed: Ericsson, Huawei, Nokia, ZTE and Samsung. Huawei and ZTE continued to dominate their home market of China, while Ericsson, Nokia and Samsung lead in markets outside China.

“Samsung’s next generation portfolio readiness has helped the company improve its footprint in especially North America and the Asia Pacific. In addition to its improved global RAN share, we estimate Samsung is well positioned in the nascent vRAN segment,” Pongratz said.

As for Fujitsu, he noted that it reported solid results in the quarter, underpinned by its improving footprint in the U.S. market thanks to Dish Network.

Separately, Dell’Oro Group said open RAN revenues more than doubled in the first quarter, supported by strong growth in both the Asia Pacific and North America, where, among U.S. operators, Dish is the leading proponent of open RAN.