Mobile Experts: Open RAN market drops 83% in 2024 as legacy carriers prefer single vendor solutions

As expected, the Open RAN market ‘screeched to a halt’ during 2024. Mobile Experts released a new report on Open RAN, which it described as ‘the most bizarre market growth profile ever seen in the wireless market.’ After ‘great success’ with deployment in greenfield networks by the DISH Networks in the U.S., Rakuten in Japan and 1&1 in Germany, the market research firm is predicting a significant slump this year with a very slow recovery (see chart below).

“Our revenue chart for Open RAN looks like the Grand Canyon,” said Joe Madden, Principal Analyst at Mobile Experts. “All of the big clean-sheet O-RAN deployments have finished their major buildout phase, so now the market will transition to upgrades on legacy networks. But legacy networks will use Open RAN differently.”

“Many people don’t understand why legacy mobile operators are rejecting the original Open RAN business model and are choosing a Single Software business model instead. This report provides clear guidance on why the market is fundamentally changing.”

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Comment and Analysis:

The original Open RAN business model called for multiple vendors to provide the equivalent of a disaggregated base station.  That is why it was dubbed “Open.”  However, legacy carriers prefer a closed solution, where a single vendor is the primary supplier of hardware and software for an Open RAN system. This limits the supply chain diversification that O-RAN was designed to promote and pushes out new vendors. Some examples of single vendor Open RAN solutions include:

  • AT&T and Ericsson: AT&T’s five-year, $14 billion Open RAN contract is a single vendor Open RAN deal. 
  • Deutsche Telekom and Nokia:  Deutsche Telekom’s contract with Nokia includes the initial deployment of Fujitsu radios in Northern Germany. 
  • NTT DOCOMO and Nokia: NTT DOCOMO will use Nokia as its vendor to deploy Open RAN. 
  • Verizon and Nokia and Samsung Networks: Verizon has been using “Open RAN-capable” virtual RAN (vRAN) systems from Nokia and Samsung Networks for several years, but that is not true Open RAN as per O-RAN Alliance specs.  Verizon could evolve its vRAN deployments with Samsung Networks into an Open RAN architecture, following the recent appointment of Open RAN advocate Yago Tenorio as its CTO.

–>Meanwhile, there are still no official standards for Open RAN- only O-RAN Alliance specs.

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The new report lays out the expected revenue in hardware (radios, servers, antennas) and software (vDU, vCU, RIC, xApp, rApp, and dApp) through 2029, as major operators like AT&T, Vodafone, Verizon, Telus, DoCoMo, and others begin to buy mobile infrastructure from alternative vendors.

“The US Government is pumping hundreds of millions of dollars into Open RAN,” continued Mr. Madden. “But sadly, the biggest challenge of Open RAN will not be addressed by NOFO and other government grants. Each grant will be too small to fix the fundamental economic challenge of Open RU hardware. The market will solve the problem anyway, without government help. Get our report for the details.”

Here’s a chart of Open RAN revenue by year:

 

Subscribers to the Open RAN 2024 report will receive:

  • Full access to the 40-page Open RAN 2024 report;
  • Clear breakdowns of the 5-year forecast in an Excel spreadsheet;
  • Detailed technical background and architectural analysis;
  • Insight into the pace of upcoming projects with legacy operators; and
  • Access to the analysts behind the reports.

 

References:

https://www.prnewswire.com/news-releases/the-open-ran-market-dropped-83-in-2024-it-will-grow-back-302275961.html

https://www.telecoms.com/open-ran/open-ran-market-fell-83-in-2024

https://mobile-experts.net/reports/p/oran24?rq=open%20RAN

NTT advert in WSJ: Why O-RAN Will Change Everything; AT&T selects Ericsson for its O-RAN

Parallel Wireless deploys 1,500 Open RAN sites across Africa; partners with Hotspot Network in Nigeria

DISH Wireless Awarded $50 Million NTIA Grant for 5G Open RAN Center (ORCID)

Deutsche Telekom Network Day: Fiber, Mobile Network, Open RAN and 5G SA Launch in 2024

NTT DOCOMO OREX brand offers a pre-integrated solution for Open RAN

Strand Consult: The 10 Parameters of Open RAN; AT&T memo to FCC

Mobile Experts: Ericsson #1 in RAN market; Huawei falls to #3

According to a new report from analyst firm Mobile Experts, Ericsson leapt into the #1 position in the RAN market for 2021. Ericsson (see Table 1. at bottom of this article), which achieved a 26.9% share of a market that grew by about 3% in value to be worth in the region of $45 billion last year.

Sanctions hit Huawei very hard as the Chinese tech giant dropped to third place in the RAN market in terms of the value of sales with a 20.4% market share.  Huawei had a shortfall of roughly $4B last year due to the company’s inability to produce high-capacity TDD base stations.   That was because of U.S. Government sanctions on the critical components needed.  As a result, Huawei achieved much lower dollar value than their western competitors.

Nokia (21.9% market share) placed third while ZTE achieved fourth place (14.5%) ahead of Samsung (8% market share).

 

“Our approach to forecasting is deeply analytical, using data from more than 100 sources, rather than simply the inputs of five OEMs.  Our approach works. This analyst team has been creating some of the most accurate, detailed forecasting on the market for over a decade,” commented Chief Analyst of Mobile Experts, Joe Madden. “We have developed relationships with suppliers, operators, and vendors that give us data for a three-pronged approach to triangulation on mobile infrastructure revenue.”

Mobile Experts’ models show the RAN market growing at a CAGR (Cumulative Annualized Growth Rate) of 3%, with -1% growth in macro base stations and 25%-35% growth in millimeter wave and software segments. The analyst firm, known for their unmatched accuracy, leverage over a decade of ear-to-ground experience in this market to present this detailed market forecast that presents last year’s findings concisely and completely as well as presenting what’s next for the RAN market and its players.

“Overall, the RAN market is looking up. After 30 years of boom-and-bust cycles, the market is currently reaching a peak with 5G deployment in its active mode this year.  In coming years, we see new revenue coming in from private enterprises to offset the natural drop in CSP sales; specifically, the private LTE/5G market will grow by 19%, accounting for more than $4 billion in 2026. As a result, the total RAN market will remain near its 5G peak for a few years, with the possibility for growth in the longer term,” commented Chief Analyst Joe Madden.

Total Year Review for 2021 – Global RAN Revenue:

 

This pre-earnings report offers a comprehensive overview of the RAN market with Mobile Experts’ signature accuracy and detailed breakdowns.  This quarter’s report includes revenue estimates for the top 25 vendors in the RAN market for 2021.    This is the first of a series of quarterly updates, and it is available today for instant download with purchase at www.mobile-experts.net.

For more about this research and buy the report, click here. 

About Mobile Experts Inc.:

Mobile Experts provides insightful market analysis for the mobile infrastructure and mobile handset markets.  Our analysts are true Experts, who remain focused on topics where each analyst has 25 years of experience or more. Research topics center on technology introduction for radio frequency (RF) and communications innovation.  Recent publications include: RAN Revenue, Cellular V2X, Fixed Mobile Convergence,  Edge Computing, In-Building Wireless,  CIoT, URLLC, Macro Base Station Transceivers, Small Cells, VRAN, and Private LTE.

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Table 1: Ericsson’s headline figures (Swedish Krona-SEK billions)

2021 2020 Change
Net sales 232.3 232.4 0%
Gross income 100.7 93.7 7%
Gross margin 43.4% 40.3%
Research and development expenses -42.1 -39.7
Selling and administrative expenses -27.0 -26.7
Impairment losses on trade receivables 0.0 0.1 -134%
Other operating income and expenses 0.4 0.7 -45%
Share in earnings of JV and associated companies -0.3 -0.3
EBIT 31.8 27.8 14%
– of which networks 37.3 30.9 21%
– of which digital services -3.6 -2.2
– of which managed services 1.5 1.6 -6%
– of which emerging business and other -3.4 -2.4
EBIT margin 13.7% 12.0%
Financial income and expenses, net -2.5 -0.6
Income tax -6.3 -9.6 30%
Net income -0.5 -1.3
Source: Ericsson