According to Stefan Pongratz of Dell’Oro, U.S. suppliers collectively accounted for around 16% of the global telecom equipment market in 2022, underpinned by strong presence in broadband access, optical transport and Service Provider Routers. Not surprisingly, this global view is masking the progress to some degree. If we exclude China, we estimate that the 20+ American suppliers comprise ~20% of the broader telecom equipment market.

U.S. suppliers appear to be struggling more in the RAN market. Per Dell’Oro’s 4Q22 RAN report, the American-based vendors still accounted for less than 1% of the global RAN market in 2022. Even if China is removed, the aggregate revenue share remains in the same range.

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Editor’s Note:  The big 5 have dominated the global RAN market for over 15 years.  Huawei, Ericsson, Nokia, ZTE, and Samsung together have about 95% of the global RAN market. Pongratz  expects global RAN revenues to decline at a low-single-digit rate for 2023, with a surge in spending from India-based operators to fuel their 5G plans offset by dropping demand in China, Europe, and North America.

“After four years of extraordinary growth that catapulted the RAN market to record levels in 2021, the RAN market is now entering a new phase,” Pongratz wrote. “Even with 5G still increasing at a healthy pace, comparisons are more challenging and the implication for the broader RAN market is that growth is decelerating.”

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Dell’Oro estimates that the collective RAN revenues for the U.S. suppliers had an increased of 60% in 2022 relative to 2020, in part because of the improved entry points with Open RAN.  U.S. network equipment vendors are fairly optimistic about the growth prospects:

• Mavenir is targeting 30%+ growth in 2023. While the mobile core network continues to drive the lion’s share of its revenue mix, Mavenir’s 10,000+ macro-site brownfield pipeline is expected to play a pivotal role in reaching this $1 billion group revenue target for FY23.
• Celona is working with 100+ customers and has seen a 300%+ increase in the number of connected devices across its 5G installed base. The vendor is now targeting to more than double its revenues this fiscal year.
• JMA has not shared any growth objectives for its wireless business. Even so, the vendor has announced multiple DoD wins and believes its all-American team is well positioned to support advanced private 5G networks for the U.S. government.
• Verana Networks is set to work on a trial with Verizon later this year.
• Dell is planning to enter the vRAN market over the next year, allegedly.
• Airspan’s equipment and software revenue growth slowed in 2022. Still, trial activity is on the rise and Airspan remains hopeful that its 400+ private network wins will soon have a more meaningful impact on the topline.
  

At the same time, it is early days in this process of re-shaping the RAN. And even if global market concentration as measured by the Herfindahl-Hirschman Index (HHI) is actually trending in the right direction, vendors with smaller footprints are still trying to figure out the best near-term and long-term approaches to improve their respective RAN positions – some think that open RAN can be an entry point for brownfield macro opportunities while others believe the likelihood of winning is greater in greenfield settings (public or private).

Open RAN might help to open the door, but this movement does not change the fact that RAN remains a scale game and double-digit RAN revenue shares are still required to maintain competitive portfolios.

Currently, this vendor asymmetry between RAN and the broader telecom equipment market then also implies that the U.S. suppliers are actually doing rather well beyond the wireless scope. In fact, if we remove the RAN from the picture, we estimate that the U.S. vendors accounted for around a fourth of the global non-RAN telecom equipment market. Better yet, if we take it one step further and also strip out China, the data shows that the American team comprised around one third of the non-RAN telco equipment market excluding China.

Dell’Oro’s assessment is that the U.S. suppliers hold a strong position in the non-RAN telecom equipment market. When it comes to RAN, however, the data shows that the American-based suppliers are moving in the right direction, especially in private wireless. But the overall progress has been slow, and it is still a long road ahead before we can establish that the U.S. suppliers are back at full speed in the broader public plus private 5G RAN business

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Stefan Pongratz is a vice president at the Dell’Oro Group. He joined Dell’Oro in 2010 after spending 10 years with the Anritsu Company. Pongratz is responsible for the firm’s Radio Access Network and Telecom Capex programs and has authored advanced research reports on the wireless market assessing the impact and the market opportunity with small cells, C-RAN, 5G, IoT and CBRS.

References:

https://www.fiercewireless.com/wireless/what-state-us-ran-and-non-ran-suppliers-pongratz

Dell’Oro: Worldwide Telecom Equipment Market Growth +3% in 2022; MTN: +2% Network Infrastructure Growth in 2022

Dell’Oro: Private 5G ecosystem is evolving; vRAN gaining momentum; skepticism increasing

Dell’Oro: 5G RAN growing; total RAN growth is slowing over next 5 years

Dell’Oro: RAN Market Disappoints in 2Q-2022

Dell’Oro: Market Forecasts Decreased for Mobile Core Network and Private Wireless RANs