Global RAN Revenues Anticipated to Decline in 2024: Dell’Oro Group

In a notable shift from the robust growth witnessed between 2017 and 2021, the revenues of Radio Access Network (RAN) are poised for a substantial decline in 2023.
Kazakhstan mobile networkAfter stabilizing in 2022, the global market conditions for RAN are projected to remain challenging in 2024, particularly with the Indian RAN market scaling back. Indian telecom operators such as Bharti Airtel and Reliance Jio are in the process of expanding their 5G network in key cities and towns across the country.

Analysts suggest that while the global decline in RAN business is expected to persist, the pace of descent for the remainder of the forecast period should exhibit a more moderate trajectory. Key RAN vendors are Ericsson, Nokia, Huawei, ZTE, Samsung, among others.

Stefan Pongratz, Vice President at Dell’Oro Group, commented on the overarching scenario, stating, “The big picture has not changed. MBB-based investments are now slowing, and the upside with new growth areas including Fixed Wireless Access (FWA) and private wireless is still too small to alter the trajectory.”

Stefan Pongratz further pointed out that the MBB market is also grappling with the significant mid-band capacity boost relative to current data traffic growth rates in certain markets, potentially impacting the timing for capacity upgrades.

Key findings from the Mobile RAN 5-Year January 2024 Forecast Report include:

Global RAN Revenues Projection: Worldwide RAN revenues are expected to decline at a Compound Annual Growth Rate (CAGR) of 1 percent over the next five years.

Regional Dynamics: The Asia Pacific region is anticipated to lead the decline, while North America’s growth prospects are predicted to improve following more favorable comparisons post-contractions in 2023.

5G-Advanced Impact: Though 5G-Advanced is poised to play a significant role in the broader 5G journey, it is not anticipated to fuel another major capital expenditure (capex) growth cycle.

MTN Consulting recently said annualized capital intensity of telecoms operators peaked at 18.7 percent in Q1 2023 and has begun to come down rapidly, now that most 5G networks are built. Capital intensity of telecoms operators will start to come back in 2027 and hit 17.1 percent in 2028, the report said.

Capex of telecoms will decline slightly through 2025. Capex of telecoms will reach $331 billion in 2028, which would be a 17.1 percent capital intensity. US telecoms Capex surged in 2022, but will decrease significantly in both 2023 and 2024, MTN Consulting said.

Growth Segments: Despite the overall decline, certain RAN segments are projected to experience growth over the next five years. These include 5G New Radio (NR), Fixed Wireless Access (FWA), millimeter wave (mmWave), Massive Multiple Input Multiple Output (MIMO), Open RAN, private wireless, small cells, and Virtualized RAN.

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