The positive momentum that has characterized the Radio Access Network (RAN) market over the past four years is losing some steam, according to a new report from Dell'Oro Group. The overall 2G-5G RAN infrastructure equipment market – including hardware and software – declined in the second quarter, recording the first year-over-year contraction in more than two years and the third consecutive quarter of RAN coming in below expectations. Although the RAN market is not immune to external risks, initial readings suggest that the RAN impact from deteriorating macro conditions, high levels of inflation, and supply chain disruptions were limited in the quarter.
"The shift in the pendulum is not a surprise, but admittedly it has swung a bit faster toward the negative than initially expected", said Stefan Pongratz, Vice President at Dell'Oro Group. "Slower momentum is not a sign that the 5G deployment phase is over. The message we have communicated for some time now, namely that the 5G cycle will be longer than previous technology cycles, still holds. At the same time, market conditions in the quarter were impacted by APAC, excluding China, Russia, and foreign exchange," continued Pongratz.
Additional highlights from the 2Q 2022 RAN report:
- Top 5 global suppliers in the quarter include Huawei, Ericsson, Nokia, ZTE, and Samsung.
- Top 4 suppliers outside of China in the quarter include Ericsson, Nokia, Huawei, and Samsung.
- Huawei and ZTE continued to dominate in China, together accounting for 90 to 95 percent of 1H 2022 revenues.
- Ericsson maintained its grip on the RAN market outside of China, accounting for 39 percent of the revenues for the 1H 2022.
- Nokia's RAN position outside of China improved between 1Q and 2Q 2022.
- Samsung's 1H 2022 RAN share improved both in North America and globally.
- Even though RAN results disappointed in the quarter and first half revenues are tracking below expectations, RAN is still projected to record a fifth consecutive year of growth in 2022.
