RAN market poised to eclipse $200B: Dell’Oro Group

COVID-19 has not killed the radio access network (RAN) market. In fact, the Dell’Oro Group just upwardly revised its projections for the sector, saying the RAN market will grow at a healthy pace over the next three years. Cumulative investments over the 2019-2024 forecast period are expected to be over $200 billion.

“It might seem a little silly right now to forecast this much growth,” said Stefan Pongratz, vice president at Dell’Oro. Historically, the RAN market saw no growth for many years, and now they’re projecting mid-single-digit growth. “We’re not saying we’re immune to the pandemic,” but the positive effects of 5G rollouts in places like China, Korea and the United States will offset some of the drawbacks. “We remain optimistic.”

With the current recession, Dell’Oro adjusted the forecast downward for some of the slower-to-adopt mobile broadband markets, including parts of Europe, Middle East, Africa, Latin America and Asia Pacific where there will be some short-term hits, he said. But this is the first recession in recent memory where the industry is in the middle of a brand-new technology rollout.

He identified three main drivers. The pace of 5G deployments in China is faster than expected, with China Broadcasting taking on a bigger role. In the U.S., T-Mobile closed its merger with Sprint, providing a degree of certainty and giving more visibility into Dish Network’s wireless ambitions. And the outlook for millimeter wave (mmWave) and fixed wireless access (FWA) is turning out to be better than expected.

Dell’Oro revised its mmWave outlook upward based on improved momentum in the Asia Pacific region.  

The improved outlook for FWA may be tied to both technology advancements and improvements in the business case, he said. Taken together with shifting usage patterns as a result of COVID-19 and more optimism about FWA from by major manufacturers, that’s looking more promising than before, according to Pongratz.

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That said, there are some logistical challenges associated with COVID-19 that are unavoidable. Even if demand exists, someone has to get to the sites to deploy equipment, so if that’s not possible due to permitting and related challenges, that’s going to have an impact. But for the most part, supply chain issues have had a smaller effect on the RAN market and much of the risks have been mitigated. More on that will be known as companies report their second-quarter results, he said.

The escalation of geopolitical uncertainty—the British government last week made a final determination to completely ban Huawei equipment from the country’s 5G wireless networks—is resulting in a boost for the open RAN market. It’s challenging to come in as a new open RAN player, but if operators are forced to replace Huawei gear, it can increase the chance for opportunities. That, along with legacy infrastructure vendors such and Nokia and Ericsson getting behind open RAN efforts, is driving that market, according to Pongratz.