Dell’Oro said in its report on Radio Access Networks (RANs) that the overall 2G-5G RAN market was down year-over-year for the second straight quarter.
At the same time, Analysys Mason says the industry as a whole is “facing declining revenues and rising investment costs, causing it to underperform the market index.”
“And it continues to have some of the highest capital expenditures, driven by network and infrastructure investments, particularly related to 5G deployment and the prospect of 6G,” says Analysys Mason.
Stefan Pongratz (pictured), VP of the Dell’Oro Group, said, “After four years of extraordinary growth that drove the RAN market to record levels in 2021, the RAN market is now entering a new phase.”
He added: “Even with 5G still growing at a healthy pace, comparisons are more challenging and the implication for the wider RAN market is that growth is slowing.”
Dell’Oro’s preliminary findings suggest that the sluggish momentum that characterized the RAN market in the first half of 2022 continued into the third quarter. And it continues.
Pongratz said, “Nevertheless, a big difference between 4G and 5G is that there are now more frequency options for operators to pursue, helping to counter the decline in the post-peak rollout phase.”
Surprisingly, the report states that the top five global vendors in the quarter are Huawei, Ericsson, Nokia, ZTE and Samsung. The top four vendors outside of China in the quarter are Ericsson, Nokia, Huawei and Samsung.
The short-term outlook for the RAN has been revised down to reflect weaker-than-expected growth in the first three quarters of 2022. More challenging comparisons in India and China, Europe and North America.
Analysys Mason says the biggest challenge the industry will face in 2023 is how it deals with the effects of inflation, particularly rising energy costs, and the response to any price increases that are passed on to customers.
In addition, it comes against the backdrop of current market challenges that are already testing the industry’s ability to provide services, tap new revenue streams and return value to shareholders.
Larry Goldman, principal analyst at Analysys Mason, said: “After a decade of low inflation and low interest rates, the telecom industry is facing uncertainty about how it will be affected by these cost increases and to what extent it can raise its prices. ” In answer.”
He added: “With high capital costs and questions about potential returns, the market outlook remains challenging as the telecom industry tries to navigate its way through price increases, network availability rollouts and new service launches.”
“The sector has underperformed the market index over the past decade and reported lower returns in 2021,” Analysys Mason reports.
It was down 7 percentage points against the European market and performed similarly to markets in North America and Asia.
“And it has one of the highest capital expenditures, driven by network and infrastructure investments, particularly related to 5G deployment, further development of 5G architectures, and the prospect of 6G.”