Mobile RAN declines at its fastest pace in 7 years

The one thing that handles mobile communications, the global market for radio access networks has been declined at its fastest pace in almost seven years last quarter, according to a report from Dell’Oro Group, adding bad news to 5G equipment vendors already struggling with sluggish customer demand.

As much as the markets were already expected to weaken, the magnitude of the reversal was “much steeper than anticipated” and heralds a full-year decline in global RAN revenues, said the Redwood City, California-based company, whose reports are widely watched by the industry.

The unexpected came after an intense ramp-up by operators from 2017 to 2021, and somewhat more stable revenues through 2022 and into the first quarter of 2023. In a statement on Tuesday, vice president Stefan Pongratz said Dell’Oro attributed the poor performance in the quarter to “the clouds forming in North America”. The drop was also amplified by the extra inventory accumulated over the past couple of years to mitigate supply-chain risks, he added.

The pressure is intensified on suppliers, who themselves are already struggling with stagnating sales, as high inflation and rising interest rates are increasingly affecting operators’ spending plans. Both Ericsson and Nokia cut guidance in their latest earnings reports, citing a weaker demand outlook.

Ericsson and Samsung Electronics both saw a decline in RAN market share between 2022 and the first half of 2023, while Nokia recorded the largest revenue-share gain over the period, the report said. Chinese vendor Huawei Technologies’ quarterly share reached the highest level in three years.