Dell’Oro: 2023 global telecom equipment revenues declined 5% YoY; Huawei increases its #1 position

Preliminary Dell’Oro Group data found that worldwide telecom equipment revenues across the six telecom programs tracked  – Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch – declined 5% year-over-year (YoY) for the full year 2023, performing worse than expected.   First and foremost, challenging comparisons in some of the advanced 5G markets with higher 5G population coverage taken together with the slow transition towards 5G SA helped to partially explain steep declines in wireless-based investments. This capex deceleration was not confined to the RAN and MCN segments. Following a couple of years of robust PON investments, operators were able to curtail their home broadband capex as well. This reduction was more than enough to offset positive developments with optical transport and Service Provider routers.

The North America telecom equipment market declined faster than expected. Initial readings show that the aggregate telecom equipment market dropped by roughly a fifth in the North America region, underpinned by weak activity in both RAN and Broadband Access. On the bright side, regional dynamics were more favorable outside of the US. Our assessment is that worldwide revenues excluding North America advanced in 2023, as positive developments in the Asia Pacific region were mostly sufficient to offset weaker growth across Europe.

Also contributing to the regional and technology trends is the disruption caused by Covid hoarding and the supply chain crisis. Although this inventory correction was not felt everywhere and varied across the telecom segments, it was more notable in the RAN this past year.

Renewed concerns about macroeconomic conditions, Forex, and higher borrowing costs are also weighing down prospects for growth. The gains in the USD against the Yuan and the Yen are impacting USD-based equipment revenue estimates in China and Japan.

………………………………………………………………………………………………………………………………………………………………………………………………

Dell’Oro says that Huawei maintained its lead as the top global telecom equipment company by revenue in 2023, despite efforts by the U.S. government and other countries to limit its addressable market and access to Android and the latest chips and semiconductor technology from TSMC.  In fact, Dell’Oro’s assessment is that Huawei’s lead widened in 2023, in part because its limited exposure to the North America region was a benefit in 2023 on a relative basis.

Supplier rankings were mostly unchanged.  However, vendor revenue shares shifted slightly in 2023. Still, the overall concentration has not changed – the top seven suppliers accounted for around 80% of the overall market.

Market conditions are expected to remain challenging in 2024, though the decline is projected to be less severe than in 2023. The analyst team is collectively forecasting global telecom equipment revenues to contract 0 to -5% in 2024. Risks are broadly balanced. In addition to currency fluctuations, economic uncertainty, and inventory normalization, there are multiple regions/technology segments that are operating in a non-steady state.

References:

Worldwide Telecom Equipment Market Slumps in 2023

Dell’Oro & Omdia: Global RAN market declined in 2023 and again in 2024

Dell’Oro: Broadband access equipment sales to increase in 2025 led by XGS-PON deployments

Global 5G Market Snapshot; Dell’Oro and GSA Updates on 5G SA networks and devices

Dell’Oro: Broadband network equipment spending to drop again in 2024 to ~$16.5 B

Dell’Oro: Mobile Core Network market has lowest growth rate since 4Q 2017

Dell’Oro: U.S. suppliers ~20% of global telecom equipment market; struggling in RAN business

 

Dell’Oro: RAN market declines at very fast pace while Mobile Core Network returns to growth in Q2-2023

A new report from Dell’Oro Group says RAN sales declined at their fastest pace in nearly seven years during Q2-2023. According to preliminary findings from the market research firm, following the ‘intense ramp-up’ from 2017 through 2021.  While RAN revenues stabilized in 2022 and 1Q23, market conditions worsened in the second quarter, resulting in RAN declining at the fastest pace in nearly seven years. The decline was not unexpected by Dell’Oro, yet the magnitude of the reversal was much steeper than anticipated.

………………………………………………………………………………………………………………………………..

The RAN market decline was surely expected by IEEE Techblog readers, as this publication has warned for years about the commercial failure of 5G mobile networks.

………………………………………………………………………………………………………………………………..

“It is tempting to point the finger at data traffic patterns, 5G monetization challenges, and the odds stacked against an economy struggling with persistent levels of elevated inflation,” said Stefan Pongratz, Vice President at Dell’Oro Group. “Although these are, of course, important factors, we attribute the poor performance in the quarter to the clouds forming in North America. Alongside challenging 5G comparisons, the decline was amplified by the extra inventory accumulated over the past couple of years to mitigate supply chain risks,” Pongratz added.

Additional highlights from the Q2-2023 RAN report:

  • Top 5 RAN suppliers for 1H23 include Huawei, Ericsson, Nokia, ZTE, and Samsung.
  • Nokia recorded the largest RAN revenue share gains between 2022 and 1H23.
  • Huawei’s quarterly RAN share reached the highest level in three years. Huawei’s 2Q23 RAN revenue share outside of North America was as large as Ericsson and Nokia combined.
  • Ericsson and Samsung’s RAN revenue shares declined between 2022 and 1H23.
  • Regional projections are mostly unchanged; however, the short-term outlook has been revised upward in APAC excluding China and downward in the North American region.
  • Global RAN revenues are expected to decline in 2023.

…………………………………………………………………………………………………………….

In a separate report, Dell’Oro says the Mobile Core Network (MCN) market returned to growth in 2Q 2023. The China region returned to growth and Europe, the Middle East, and Africa (EMEA) had the strongest quarterly growth rate since 3Q 2020.

“The MCN market shined on many fronts this quarter. The China region returned to growth with increased spending by two of the four Mobile Network Operators (MNOs). The EMEA region had its best quarterly growth rate since 2020, Huawei had record high revenues for the quarter, and Ericsson had its highest growth rate since 2Q20, as examples,” stated Dave Bolan, Research Director at Dell’Oro Group. “As a result, we are raising our outlook for 2023 year-over-year (Y/Y) growth rate from low single-digit percent to mid-single-digit percent.”

“As of 2Q 2023, we counted 44 Mobile Network Operators (MNOs) that have launched commercial 5G SA networks. One was added in 2Q 2023, Telefónica – Spain. The North America and EMEA regions of the 5G MCN segment Y/Y growth rates were in the triple-digit percent, signaling capacity additions to the 5G SA networks in both regions,” continued Bolan.

Editor’s Note:  Despite years of promises, neither AT&T or Verizon has yet to deploy a 5G SA core network, without which no 3GPP defined 5G features/functions are possible.

…………………………………………………………………………………………………………………………

Additional highlights from the 2Q 2023 Mobile Core Network and Multi-Access Edge Computing Report include:

  • The top MCN vendors worldwide for 2Q 2023 were Huawei, Ericsson, Nokia, and ZTE.
  • The top 5G MCN vendors worldwide for 2Q 2023 were Huawei, Ericsson, ZTE, and Nokia.
  • Five MNOs launched commercial 5G SA networks in 1H 2023.

References:

RAN Declines at the Fastest Pace in Seven Years, According to Dell’Oro Group

Mobile Core Network Market Returns to Growth in 2Q 2023, According to Dell’Oro Group

Dell’Oro: RAN Market to Decline 1% CAGR; Mobile Core Network growth reduced to 1% CAGR

Dell’Oro: OpenRAN revenue forecast revised down

​ through 2027

Dell’Oro: U.S. suppliers ~20% of global telecom equipment market; struggling in RAN business

 

 

Dell’Oro: Broadband Equipment Spending to exceed $120B from 2022 to 2027

Dell’Oro Group predicts the broadband equipment market will surpass $120 billion in cumulative spending between 2022 and 2027. The market research firm says sales of PON equipment for fiber-to-the-home deployments, cable broadband access equipment, and fixed wireless CPE will show a 0.2% Compounded Annual Growth Rate (CAGR) from 2022 to 2027.  Service providers continue to expand their fiber and DOCSIS 3.1/4.0 networks, while also increasing the reliability and sustainability of their broadband access networks.

“After three consecutive years of tremendous broadband network expansions and upgrades, 2023 is expected to show a return to normalized levels of spending,” said Jeff Heynen, Vice President of Broadband Access and Home Networking research at Dell’Oro Group. “After 2023, spending is expected to increase through 2026 and 2027, driven by 25 Gbps and 50 Gbps PON, Fixed Wireless CPE, as well as DAA and DOCSIS 4.0 deployments.”

Labor markets are “still being challenged” and a number of fiber based network operators (AT&T, Altice USA, Frontier) have reduced their expansion plans and homes passed targets. “To close out 2022 we did see a significant uptake in equipment purchases, and what happened there was supply chains appeased. A lot of orders that had been on the books for a long time have been fulfilled.”

Network equipment vendors are working through that inventory they had built up while taking on “additional equipment purchases.

Additional highlights from the Broadband Access & Home Networking 5-Year July 2023 Forecast Report:

  • PON equipment revenue is expected to grow from $11.8 B in 2022 to $13.3 B in 2027, driven largely by XGS-PON deployments in North America, EMEA, and CALA.
  • Revenue for Cable Distributed Access Equipment (Virtual CCAP, Remote PHY Devices, Remote MACPHY Devices, and Remote OLTs) is expected to reach $1.6 B by 2027, as operators ramp their DOCSIS 4.0 and fiber deployments.
  • Revenue for Fixed Wireless CPE is expected to reach $2.7 B by 2027, led by shipments of 5G sub-6GHz and 5G Millimeter Wave units.
  • Revenue for Residential Wi-Fi Routers will surpass $5.2 B in 2027, owing to massive shipments of Wi-Fi 7 units.
Heynen thinks the 2023 slowdown will be “more acute” in North America than in other regions, given the subsidized broadband growth over the last few years. Not only is the industry seeing “the tail end of some of the RDOF [Rural Digital Opportunity Fund] projects,” but the process for the Broadband Equity, Access and Deployment (BEAD) program is just beginning.

“Which isn’t going to float to manufacturers until you know, late 2024, really into 2025,” he said. “I think in the interim, XGS-PON in the European market is certainly going to catch up. We’re also seeing considerable growth in XGS-PON deployments now in China.”

In Dell’Oro’s five-year forecast published in January, Heynen expected fixed wireless subscriber growth, particularly in North America, would “start to moderate” beginning in 2024, due to factors like “capacity issues and fiber expansion.”

Heynen has increased his revenue predictions for the fixed wireless CPE market – which he previously tipped would hit $2.2 billion in five years – and now predicts subscriber growth to continue into 2025.

“Part of that is because of the net reduction in homes passed for fiber,” he said. “In the meantime, fixed wireless will be able to cover more ground while the operators who are building out fiber kind of extend their overall deployment plans.”

Further, operators like T-Mobile and Verizon “are seeing fixed wireless as a way to secure broadband subscribers away from cable operators. The U.S. market is really dynamic in terms of how services can be marketed.”

About the Report:

The Dell’Oro Group Broadband Access & Home Networking 5-Year Forecast Report provides a complete overview of the Broadband Access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for PON, Cable, Fixed Wireless, and DSL equipment. Covered equipment includes Converged Cable Access Platforms (CCAP), Distributed Access Architectures (DAA), DSL Access Multiplexers (DSLAMs), PON Optical Line Terminals (OLTs), Customer Premises Equipment ([CPE] for Cable, DSL, PON, Fixed Wireless), along with Residential WLAN Equipment, including Wi-Fi 6E and Wi-Fi 7 Gateways and Routers. For more information about the report, please contact [email protected].

About Dell’Oro Group:

Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, data center infrastructure markets.  Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions.  For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.

References:

Despite 2023 Slowdown, Cumulative Broadband Equipment Spending Expected to Exceed $120 B Between 2022 and 2027, According to Dell’Oro Group

https://www.fiercetelecom.com/telecom/broadband-equipment-market-eclipse-120b-2027-delloro

Dell’Oro: XGS, 25G, and Early 50G PON Rollouts to Fuel Broadband Spending

Dell’Oro: Bright Future for Campus Network As A Service (NaaS) and Public Cloud Managed LAN

Dell’Oro: FWA revenues on track to advance 35% in 2022 led by North America

Dell’Oro: PONs boost Broadband Access; Total Telecom & Enterprise Network Equipment Markets

Dell’Oro: U.S. suppliers ~20% of global telecom equipment market; struggling in RAN business

Futuriom and Dell’Oro weigh in on SD-WAN and SASE market: single vendor solutions prevail

 

Dell’Oro: Bright Future for Campus Network As A Service (NaaS) and Public Cloud Managed LAN

 Dell’Oro Group believes that Campus NaaS revenues will grow quickly over the next five years, eclipsing the growth rate of the Public Cloud-Managed LAN market.

“Campus NaaS is an emerging market and vendors are approaching it from different angles,” said Siân Morgan, Wireless LAN Research Director at Dell’Oro Group.  “All of the Campus NaaS variants are inspired by the cloud-consumption model, but that’s where their similarities end.  Each version is targeted at different segments and has different growth potential.  Some offers will help vendors gain market share, while others could expand the overall size of the market.”

“LAN equipment manufacturers are expected to generate a record level of revenues this year, but we are predicting a contraction in 2024.   We expect to see Campus NaaS gain traction as the LAN Market slows down.  The recurring price structure and maintenance-free technology are two elements that will resonate with certain segments of enterprises,” added Morgan.

Additional highlights from the brand new Campus NaaS and Public Cloud-Managed LAN Advanced Research Report:

  • Recurring license revenues are becoming a material force for revenue growth, and these will gain pace as Public Cloud-Managed LAN revenues grow to $9 B in 2027.
  • The North American region will remain the largest revenue opportunity, both for Campus NaaS and Public Cloud-Managed LAN.
  • Three types of Campus NaaS are emerging: Campus NaaS Enabler; Turnkey Campus NaaS; and Wi-Fi as a Utility. Each type of Campus NaaS has different characteristics and growth drivers.
  • New vendors are jumping into the fray. Startups are emerging from stealth mode, incumbent vendors are evolving their offers, an there is an opportunity for vendors from adjacent markets to take market share.
  •  The 5-year CAGR of Campus NaaS is enhanced by its recurring revenue profile.

 Siân concluded, “The benefits of Campus NaaS offers last well beyond the revenues recognized annually. The forecasted total contract value for 2027 is $1.8 B.”

About the Report:

Dell’Oro Group’s Campus NaaS and Public Cloud-Managed LAN report investigates the various types of services available on the market, as well as those being considered but not yet commercialized.  It quantifies the Public Cloud-Managed LAN market, comparing it in size to the overall campus LAN market, including Wireless LAN and Campus Ethernet switching manufacturer revenues.  Enterprise campus NaaS is presented as a sub-segment of the Public Cloud-Managed market.  Also included is an analysis of the catalysts and inhibitors which will shape the growth of the market over the next five years and a regional breakdown of the market opportunity. For more information about the report, please contact us at [email protected].

References:

Campus NaaS Revenues to Reach $609 M by 2027, According to Dell’Oro Group

https://www.delloro.com/news/delloro-group-launches-new-campus-naas-and-public-cloud-managed-lan-advanced-research-report/

Futuriom and Dell’Oro weigh in on SD-WAN and SASE market: single vendor solutions prevail

Enterprise networking and IT cybersecurity professionals are turning to managed SD-WAN (software-defined wide area networking) and SASE (secure access service edge) services to deal with the increasing challenges caused by network complexity, according to a new report from market research firm Futuriom.

SD-WAN and SASE have been evolving and maturing for several years now, but the market is far from mature. It is still growing and is highly fragmented, both in terms of the companies involved in providing services and technology to enterprise users and in how SD-WAN and SASE capabilities are deployed and consumed by enterprises.

What’s needed more than ever are software-based platforms for integrating the management of network and security functions at the same time. This approach was first initiated by SD-WAN, which separated the software control from the hardware for branch-office networking. SD-WAN evolved and grew by adapting security functionality (SASE), which could be integrated into the network platform.

The market has expanded to include SASE functionality, which provides cybersecurity functions such as secure web gateway (SWG), cloud access security broker (CASB), firewall-as-a-service (FWaaS), intrusion detection, zero-trust network access (ZTNA), and many others to protect enterprise access to public networks and SaaS apps.

Futuriom’s survey took place in March and April of 2023. The total audience of 196 respondents came from three countries: the U.S. (127 respondents), Germany (37), and India (32).

Report Highlights and Key Findings:

  • Survey respondents indicate strong demand for SD-WAN and SASE managed services. Our survey data and discussions with end users indicate that SD-WAN/SASE technology helps professionals with network and security challenges, including the growing complexity created by distributed applications, cloud connectivity, and sprawling security risks.
  • Managing network complexity is the largest challenge driving managed services demand. When asked about the largest challenges in managing WANs, 85% of respondents identified complexity, followed by expertise and knowledge (68%). Rounding out the responses were cost (60%) and time (47%). (Multiple responses were allowed.)
  • Hybrid work and the need for zero-trust network access (ZTNA) are key drivers of SD-WAN/SASE technology. In the survey, 98% of respondents said that hybrid work has increased demand for SASE and ZTNA. When we asked respondents if ZTNA is a crucial component of SASE and SD-WAN offerings, 92% said yes.
  • Hybrid (cloud/edge deployment) and single-pass architectures will be important components of SASE/SD-WAN services going forward. When respondents were asked if they wanted a hybrid solution that can accommodate networking and security both on premises and using cloud points of presence (PoPs), 98% said yes. In addition, 94% of respondents said they prefer a single-pass architecture.
  • There will continue to be a diversity of SD-WAN/SASE deployment models. The two most popular models for deployment are best-of-breed combination (34%) and single-vendor (23%), but survey results show a wide diversity of deployment models.

Companies covered in this report: Aryaka, Amazon, AT&T, British Telecom, Cato Networks, Check Point Software, Cisco, Colt, Comcast, Deutsche Telekom/T-Systems, Forcepoint, Fortinet, HPE (Aruba), Hughes, Juniper Networks, Lumen Technology, NTT, Orange, Palo Alto Networks, Tata Communications, Telefónica, Telstra, VMware, Verizon, Versa Networks, Vodafone, Windstream, Zscaler.

…………………………………………………………………………………………………………………………

Separately, Dell’Oro Group reported that the portion of the SASE market, where vendors offer both SD-WAN and SSE (security service edge) solutions, grew an impressive 55% year-over-year (YoY) in 1Q 2023. By doing so, single-vendor SASE overtook the multi-vendor SASE portion of the market, consisting of vendors that can only offer the SD-WAN or SSE component. The overall SASE market revenue rose by over 30 percent for the fifth consecutive quarter in 1Q 2023 and, by doing so, was not far off the $2B mark.

“Even as enterprises have been more judicious in how they spend security budget, the robust growth of the SASE market is a testament to the strong commitment by enterprises and the value they bring to secure users’ access to cloud-based applications from anywhere,” said Mauricio Sanchez, Research Director at Dell’Oro Group. “The vendors that can offer both the SD-WAN and SSE components are setting themselves apart in an extremely competitive market,” added Sanchez.

Additional highlights from the 1Q 2023 SASE and SD-WAN Quarterly Report:

  • For the first time since Dell’Oro started tracking SASE in 1Q 2019, there was a revenue position change in the number one spot, with Zscaler overtook Cisco.
  • Palo Alto Networks overtook Broadcom (Symantec) for the number three overall SASE revenue position.
  • Check Point, HPE/Aruba, and Netskope became single-vendor SASE players.
  • Both SSE and SD-WAN revenue grew above 30 percent YoY.
  • Unified SASE solutions–defined as SASE solutions where SD-WAN and SSE have been tightly integrated into a single technology stack–eclipsed $200M for the third consecutive quarter, representing over 140% growth.
  • Overall SASE revenue growth on a regional basis varied from 27% in North America to 49% percent in the Caribbean and Latin America.
  • The Access Router market revenue surged forward by over 15% YoY on improved hardware supply.

About the Report

The Dell’Oro Group SASE & SD-WAN report includes manufacturers’ revenue covering the SASE and Access Router markets. In addition, the report analyzes the SASE market from two perspectives, technology (SD-WAN networking and SSE security) and implementation (unified and disaggregated). The report also provides unit information for the Access Router market. To purchase this report, please contact us at [email protected].

References:

https://www.futuriom.com/articles/news/results-from-our-sd-wan-sase-managed-services-survey/2023/06

Single-Vendor SASE Revenue Climbs 55 Percent in 1Q 2023 as More Vendors Become a One-Stop Shop, According to Dell’Oro Group

 

LightCounting: Wireless infrastructure market dropped both YoY and sequentially in 1Q23

In the  1stQ2023, the global wireless infrastructure market declined 3% YoY and 17% sequentially, according to LightCounting. Starting a new year with a sequential decline is typical but a YoY drop is abnormal and suggests a declining pattern is in the making. This trend confirms that we have entered the post-peak era.

While the U.S. market posted its steepest drop, the strong 5G rollouts in India and a 5G rebound in Japan, along with stable and sustained activity in EMEA and China, respectively, were not enough to keep the wireless infrastructure market out of the decline. On the open vRAN front, DISH in the U.S., Rakuten Mobile in Japan, and a few Rakuten Symphony customers kept the market flat YoY and produced double digit sequential growth.

Despite a weak quarter, Huawei retook its lead at the expense of Ericsson, which reported weak 1Q23 results that led to a market share loss. In the meantime, Nokia benefited from the 2 leaders’ market share loss and gained 1% point. ZTE also gained share at the expense of Huawei and Ericsson while Samsung’s share remained stable.

“We have passed the 5G peak and have entered the second year of a disinvestment cycle. The 5G investment cycle that started in 2019 and ended in 2021 was driven by hundreds of communications service providers (CSPs), including the world’s largest cellular footprints (i.e., China). At the moment, India’s massive 5G rollout is preventing the situation from getting worse but this will end soon,” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

As a result, this year, LightCounting expects the wireless infrastructure market to slightly decline in 2023 (compared to 2022) with India in the lead. In the long run, our service provider 20-year wireless infrastructure footprint pattern analysis points to a 2022-2028 CAGR of -3% characterized by low single-digit declines through 2027, which appears to be the bottom leading to flatness or slight growth in 2028. In fact, we expect 5G to slightly pick up in 2027, driven by upgrades needed to prepare networks for 6G. Given the ongoing 6G activity, we believe something labeled 6G will be deployed in 2028.

………………………………………………………………………………………………………………………………………………………………………
Separately, Stefan Pongratz, Vice President at Dell’Oro Group said, “Not surprisingly, growth is now transitioning away from the advanced markets towards the slower-to-adopt 5G markets. But the speed of this shift was perhaps a bit surprising as the pendulum swung drastically towards the positive in India while the North American RAN market performed much worse than expected.  And from a supplier perspective, vendor rankings were, for the most part, stable in the quarter. Vendor revenue shares, however, were impacted by the vastly different growth trajectories across the suppliers,” continued Pongratz.

Highlights from Dell’Oro’s 1Q 2023 RAN report:

  • Top 5 RAN 1Q 2023 RAN suppliers include Huawei, Ericsson, Nokia, ZTE, and Samsung.
  • Top 4 RAN 1Q 2023 RAN suppliers outside of China include Ericsson, Nokia, Huawei, and Samsung.
  • Nokia recorded the highest growth rate among the top 5 suppliers, while Ericsson and Samsung both lost some ground in the first quarter.
  • The report also shows that Nokia’s RAN revenue share outside of China has been trending upward over the past five quarters.
  • The Asia Pacific RAN market has been revised upward to reflect the higher baseline in India.

Open RAN and vRAN highlights from Dell’Oro’s 1Q 2023 RAN report:

  • After more than doubling in 2022, Open RAN revenue growth was in the 10 to 20 percent range in the first quarter while the vRAN market advanced 20 to 30 percent.
  • Positive developments in the Asia Pacific region were dragged down by more challenging comparisons in the North America region.
  • Short-term projections remain unchanged – Open RAN is still projected to account for 6 to 10 percent of the 2023 RAN market.
  • Top 5 Open RAN suppliers by revenue for the 2Q 2022 to 1Q 2023 period include Samsung, NEC, Fujitsu, Rakuten Symphony, and Mavenir.
……………………………………………………………………………………………………………………………………………………..
About the LightCounting Report:
Wireless Infrastructure quarterly report analyzes the wireless infrastructure market worldwide and covers 2G, 3G, 4G and 5G radio access network (RAN) and core network nodes. It presents historical data from 2016 to 2022 of quarterly market size and vendor market shares, and a detailed market forecast through 2028 for 2G/3G/4G/5G RAN, including open vRAN, and core networks (EPC, vEPC, and 5GC) for each region (North America, Europe Middle East Africa, Asia Pacific, Caribbean Latin America). The historical data accounts for the sales of more than 30 wireless infrastructure vendors, including vendors that shared confidential sales data with LightCounting. The market forecast is based on a model correlating wireless infrastructure vendor sales with 20 years of service provider network rollout pattern analysis and upgrade and expansion plans.
Historical data accounts for sales of the following vendors:
Vendor Segments Source of Information
Affirmed Networks (acquired by Microsoft, April 2020) vEPC, 5GC Estimates
Altran vRAN Estimates
Altiostar vRAN (CU, DU) Estimates
Amdocs 5GC Estimates
ASOCS vRAN (DU) None, supplies other RAN/vRAN vendors
Baicell RAN (RU) None, supplies other RAN/vRAN vendors
Benetel Open RAN (RU) None, supplies other RAN/vRAN vendors
Cisco EPC, vEPC, 5GC Survey data and estimates
China Information and Communication Technologies Group (CICT) RAN Estimates
Comba Telecom RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
CommScope (acquired Phluido vRAN patents, October 2020) vRAN (RU, DU) Estimates
Corning vRAN Estimates
Dell vRAN (DU) None, supplies other RAN/vRAN vendors
Enea 5GC Estimates
Ericsson RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Estimates
Fairwaves RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Fujitsu RAN Survey data and estimates
HPE 2G/3G core, 5GC Estimates
Huawei RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
JMA Wireless vRAN Estimates
KMW RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Kontron vRAN (DU) None, supplies other RAN/vRAN vendors
Mavenir (acquired ip.access, September 2020) vEPC, vRAN, 5GC Survey data and estimates
Metaswitch (acquired by Microsoft, May 2020) 5GC, vEPC and 2G/3G core Estimates
Movandi RAN/vRAN (RU/repeater) Estimates
MTI Mobile vRAN (RU) None, supplies other RAN/vRAN vendors
Node-H vRAN (small cells) Estimates
Nokia RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
NEC (including Blue Danube) RAN, vRAN (RU), EPC, 5GC Survey data and estimates
Oracle 5GC Estimates
Parallel Wireless vRAN (CU, DU) Estimates
Pivotal RAN/vRAN (RU/mmWave repeater) Estimates
Quanta Cloud Technology (QCT) vRAN (DU) None, supplies other RAN/vRAN vendors
Qucell RAN, vRAN Estimates
Ribbon Communications 2G/3G core Survey data and estimates
Samsung RAN, vRAN, vEPC, 5GC Estimates
Silicom Open RAN (DU) None, supplies other RAN/vRAN vendors
SuperMicro Computer vRAN (DU) None, supplies other RAN/vRAN vendors
Verana Networks RAN/vRAN (RU/mmWave) Estimates
ZTE RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
References:

Dell’Oro: U.S. suppliers ~20% of global telecom equipment market; struggling in RAN business

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.

…………………………………………………………………………………………………………………………………………………………………….

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.”

…………………………………………………………………………………………………………………………………………………………………….

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.
    Dell'Oro chart 3

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

…………………………………………………………………………………………………………………………………………………………

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

Dell’Oro: Optical Transport market to hit $17B by 2027; Lumen Technologies 400G wavelength market

According to a recent forecast report by Dell’Oro Group, the Optical Transport equipment demand is forecast to increase at a 3 percent compounded annual growth rate (CAGR) for the next five years, reaching $17 billion by 2027. The cumulative revenue during that five year period is expected to be $81 billion.

“We expect annual growth rates to fluctuate in the near term before stabilizing to a more typical 3 percent growth rate,” said Jimmy Yu, Vice President at Dell’Oro Group. “There is still a large amount of market uncertainty this year due to the economic backdrop—economists are predicting a high chance of a recession in North America and Europe. However, at the same time, most optical systems equipment manufacturers are reporting record levels of order backlog entering the year, and we expect that most of this backlog could convert to revenue when component supply improves this year,” added Yu.

Additional highlights from the Optical Transport 5-Year January 2023 Forecast Report:

  • Optical Transport market expected to increase in 2023 due to improving component supply.
  • WDM Metro market growth rates in next five years are projected to be lower than historic averages due to the growing use of IP-over-DWDM.
  • DWDM Long Haul market is forecast to grow at a five-year CAGR of 5 percent.
  • Coherent wavelength shipments on WDM systems forecast to grow at 11 percent CAGR, reaching 1.2 million annual shipments by 2027.
  • Installation of 400 Gbps wavelengths expected to dominate for most of forecast period.
About the Report

The Dell’Oro Group Optical Transport 5-Year Forecast Report offers a complete overview of the Optical Transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, wavelength shipments (by speed up to 1.2+ Tbps).  The report tracks DWDM long haul, WDM metro, multiservice multiplexers, optical switch, Disaggregated WDM, DCI, and ZR Optics.

……………………………………………………………………………………………………………………………………………………

Separately, Lumen Technologies is expanding its 400G wavelength network across North America. Lumen said it has now deployed the network in 70 markets. More than 240 data centers have access to Lumen’s 400G Wavelength Services, and the network has over 800 Tbit/s of capacity.

Lumen said it plans to continue its intercity 400G expansion this year, pushing the network “deeper into the metro edge.” The company noted that wavelength services will assist customers in moving workloads to the cloud, and provide private, dedicated connections.

Enterprise customers can also examine network options, plan out their wavelengths and get cost estimates with Lumen’s Topology Viewer.

References:

Optical Transport Equipment Market to Grow at 3 Percent CAGR through 2027, According to Dell’Oro Group

https://www.prnewswire.com/news-releases/lumen-kicks-up-its-400g-offering-across-the-us-301730126.html

Dell’Oro: Mobile Core Network & MEC revenues to be > $50 billion by 2027

According to a recently published report from Dell’Oro Group,  the Mobile Core Networks (MCN) [1.] and Multi-access Edge Computing (MEC) market revenues are expected to reach over $50 billion by 2027.

Note 1.  The Mobile Core Network is in a transitional stage from 4G to 5G and a new type of core network called the 5G Core Service Based Architecture (SBA). The 5G Core SBA is designed to be a universal core that can be the core for mobile and fixed wireless networks, wireline networks, and Wi-Fi networks. This includes the ability to be the core for 2G/3G/4G, so only one core is necessary for the long term. In addition, the IMS Core will migrate into the 5G Core SBA.

…………………………………………………………………………………………………………………………………………………………………

“The MNC and MEC market revenues are expected to grow at a  2 percent CAGR (2022-2027). We expect the MCN market for the China region to reach maturity first—due to its early start on 5G SA deployments—and is projected to have -4 percent CAGR throughout the forecast period,” stated Dave Bolan, Research Director at Dell’Oro Group.

“The worldwide market, excluding China, is projected to have a 3 percent CAGR. The Asia Pacific (APAC) and the Europe, Middle, East, and Africa (EMEA) region are expected to have the highest CAGRs throughout the forecast period as MNOs accelerate the deployments of 5G SA networks and expand their respective coverage footprints.

“There were hopes early in the year that many more [SA networks] would be launched in 2022, but the hopes were lowered as the year progressed,” Bolan explained. At the close of 2022, Dell’Oro identified 39 MNOs (Mobile Network Operators) that have commercially launched 5G SA eMMB networks.

“Reliance Jio, China Telecom-Macau, and Globe Telecom were new MNOs added to the list of 39 MNOs launching 5G SA eMMB networks in the fourth quarter of 2022. Reliance Jio has announced a very aggressive deployment schedule to cover most of India by the end of 2023. In addition, AT&T and Verizon plan large expansions to their 5G SA coverage in 2023, raising the projected Y/Y growth rate for the total MCN and MEC market for 2023 higher than 2022,” added Bolan.

Additional highlights from the January 2023 MCN and MEC 5-Year forecast report:

  • The MEC segment of the MCN market will have the highest CAGR, followed by the 5G MCN market and the IMS Core market.
  • As networks migrate to 5G SA, the 4G MCN market is expected to decline at a double-digit percentage CAGR.

About the Report:

The Dell’Oro Group Mobile Core Network & Multi-Access Edge Computing Quarterly Report offers complete, in-depth coverage of the market with tables covering manufacturers’ revenue, shipments, and average selling prices for Evolved Packet Core, 5G Packet Core, Policy, Subscriber Data Management, and IMS Core including licenses by Non-NFV and NFV, and by geographic regions. To purchase this report, please contact us at [email protected].

………………………………………………………………………………………………………………………………………………………………

From Deloitte:

“The coming migration to 5G standalone core networks is expected to allow for increased device density, reliability, and latency, opening the door to advanced enterprise applications,” according to several analysts from Deloitte’s Technology, Media & Telecommunications industry group.

“5G SA’s big attraction for MNOs are the new service and revenue opportunities it creates, Along with near-zero latency and massive device density, 5G SA enables MNOs to provide customers – specifically enterprise customers – access at scale to fiber-like speeds, mission-critical reliability, precise location services, and tailored network slices with guaranteed service levels.”

Deloitte expects the number of mobile network operators investing in 5G SA networks – with trials, planned deployments, or rollouts – to double from more than 100 operators in 2022 to at least 200 by the end of 2023.

References:

Mobile Core Network Market to Reach over $50 billion by 2027, According to Dell’Oro Group

Mobile Core Network & Multi-Access Edge Computing

 

https://www2.deloitte.com/us/en/insights/industry/technology/technology-media-and-telecom-predictions/2023/technology-media-and-telecom-predictions-standalone-5g.html

Mobile Core Network (MCN) growth to slow due to slow roll-out of 5G SA networks

Dell’Oro: Mobile Core Network market driven by 5G SA networks in China

The slow march to standalone 5G

Why is 5G SA taking so long?

Dell’Oro: SASE Market grew 33% in 2022; forecast to hit $8B in 2023

According to Dell’Oro Group, the ongoing need to modernize the network and security architecture for branch offices and hybrid users led to the vigorous 33% revenue growth in the SASE [1.] market. The market research firm anticipates that enterprises will continue to place a high priority on SASE and cause the overall SASE market to grow to $8B for the full year 2023.  In contrast, Gartner forecasts that total worldwide end-user spending on SASE will reach $9.2 billion in 2023, a 39% increase from 2022.

Note 1.  In 2019, Gartner coined the term secure access service edge, or SASE, that brings a more secure and flexible way to perform advanced security inspection directly in the cloud, instead of backhauling application traffic to a data center before forwarding it to the cloud. This cloud-first approach to security also aligns with the increasing adoption of hybrid work post-pandemic, where workers will balance their time in the office and working remote for the foreseeable future.

……………………………………………………………………………………………………………………………………………………………….

“3Q 2022 was the seventh consecutive quarter of year-over-year SASE revenue growth topping 25%, which signals the importance enterprises are placing on SASE,” said Mauricio Sanchez, Research Director, Network Security, and SASE & SD-WAN at Dell’Oro Group. “Unlike some other network security markets we track, we expect the high investment priority will continue and lead to the SASE market eclipsing $8 B in 2023,” added Sanchez.

Image Source: https://trustgrid.io/sase/

Additional highlights from the 3Q 2022 SASE & SD-WAN Quarterly Report:

  • SASE security, also referred to as SSE (the basket of products providing cloud-delivered SWG, CASB, ZTNA, and FWaaS), achieved its tenth consecutive quarter of sequential revenue expansion.
  • SASE networking, synonymous with SD-WAN, had a challenging Y/Y comparison in 3Q 2022 against a very strong 3Q 2021 when enormous pent-up demand was a significant driver. Nonetheless, the ongoing trend of improved supply chains allowed vendors to better service demand and sustain a similar level of market growth compared to recent quarters.

Cisco, Fortinet, Palo Alto Networks, Symantec/Broadcom, Versa Networks, VMware and Zscaler are the leading SASE suppliers, according to Del’Oro (see different list below).  However, Sanchez also mentioned another company not typically associated with SASE: Microsoft.

“The dark horse is Microsoft. Not a significant player today, but could easily become one virtually overnight,” he said. “Microsoft – Windows, Azure – has all the technology elements to not only do SASE but compete on a number of other fronts: identity management, firewalls, email/content security, WAF, DDoS, endpoint, cloud security, cloud networking. Moreover, Microsoft has been beating the drum louder about their security capabilities and desire to go after share of security wallet.”

Author’s Note: SASE is a single vendor turn key solution so vendor selection is ultra important.

About the Report

The Dell’Oro Group SASE & SD-WAN report includes manufacturers’ revenue covering the SASE and Access Router markets. In addition, the report analyzes the SASE market from two perspectives, technology (SD-WAN networking and SSE security) and implementation (unified and disaggregated). The report also provides unit information for the Access Router market. To purchase this report, please contact us at [email protected].

About Dell’Oro Group

Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise network, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.

…………………………………………………………………………………………………………………………………………………

Definition: SASE (an acronym coined by Gartner) converges network (SD-WAN, ZTNA) and network security services (SWG, CASB, FWaaS, etc). All of these services are integrated and delivered based on user and device identities, context, policies with continuous assessment of risk/trust throughout a session. This combination creates small perimeters around users, devices, and applications, that are then additionally hardened by security services.

Netskope research says that by 2024, at least 40% of enterprises are expected to have explicit strategies for adopting SASE. SASE solutions will help small to large businesses with extracting the security incidents mentioned in the below image. According to MarketWatch, the global SASE market is expected to reach $3936.4 million by 2026.

Image Source: https://trustgrid.io/sase/

According to Software Testing Help, the leading SASE vendors are:

To leverage the SASE platform, it should have cloud-native & cloud-based architecture. It should support all edges and be distributed globally across many PoPs (Points of Presence). A SASE platform with significant geographical reach will let you compete effectively and meet the requirements of low latency. A platform with agent-based capabilities can facilitate policy-based access, and some on-premises-based capabilities can provide network functions like QoS.

References:

https://www.delloro.com/news/strong-enterprise-demand-drives-sase-growth-33-percent-in-3q-2022/

https://www.fiercetelecom.com/telecom/microsoft-dark-horse-contender-sase-revenue-tipped-hit-8b-2023-delloro

https://www.softwaretestinghelp.com/top-sase-vendors/

Secure Access Service Edge (SASE)

Gartner: SASE tops Gartner list of 6 trends impacting Infrastructure & Operations over next 12 to 18 months

Dell’Oro: Secure Access Service Edge (SASE) market to hit $13B by 2026; Gartner forecasts $14.7B by 2025; Omdia bullish on security