5G-Advanced won't do much to advance the state of the ailing RAN market, Dell'Oro Group warned.
Dell’Oro Group’s Radio access network (RAN) maven analyst Stefan Pongratz said that network upgrades to 5G-Advanced will not cause a major RAN revival. Even though the move to 5G-Advanced will require some global operators to upgrade to a true 5G core, rather than the 4G-based non-standalone (NSA) core some 5G networks still run, it will not require a wholesale update of the existing 5G RAN infrastructure.
The Dell’Oro VP thinks that the changeover to 5G-Advanced, which starts with the 3GPP’s Release 18, will instead be an incremental switch from standard 5G to the updated flavor.
“5G-Advanced will not fuel a bounce,” Pongratz told Fierce in an email. “Instead, operators will migrate the capex from 5G to 5G-Advanced while also continuing to improve their combined capital intensity ratios."
Vendors Huawei, Ericsson, Nokia, ZTE and Samsung between them have around 95% of the global RAN market, Dell’Oro separately noted in a report in May this year. Note that American vendors - from Cisco to the smallest open RAN startup - barely get a look in.
Still challenging RAN market
Pongratz noted that conditions remain “challenging” for the broader RAN market. Worldwide RAN revenues are projected to decline at a 2% compound annual growth rate (CAGR) between 2023 and 2028, as rapidly declining LTE revenues will offset continued 5G investments.
Generally, the less advanced 5G regions are expected to perform better than the mature 5G markets. As a result, markets with lower 5G population coverage, including Middle East & Africa, Caribbean and Latin America, and Asia Pacific, excluding China and India should perform better.
The North American RAN market is starting to recover in 2024. However, North American RAN revenues are expected to remain significantly below peak levels in 2022, the analyst noted.