Omdia
Omdia on resurgence of Huawei: #1 RAN vendor in 3 out of 5 regions; RAN market has bottomed
Market research firm Omdia (owned by Informa) says Huawei remains the number one RAN vendor in three out of five large geographical regions. Far from being fatally weakened by U.S. government sanctions, Huawei today looks as big and strong as ever. Its sales last year were the second highest in its history and only 4% less than it made in 2020, before those sanctions took effect. In three out of the five global regions studied by Omdia – Asia and Oceania, the Middle East and Africa, and Latin America and the Caribbean – Huawei was the leading RAN vendor. While third in Europe, it was absent from the top three only in North America where it is banned.
Spain’s Telefónica remains a big Huawei customer in Brazil and Germany, despite telling Krach in 2020 that it would soon have “clean networks” in those markets. Deutsche Telekom and Vodafone, two other European telco giants, are also still heavy users of Huawei. Ericsson and Nokia have noted Europe’s inability to kick out Huawei while alerting investors to “aggressive” competition from Chinese vendors in some regions.
“A few years ago, we were all talking about high-risk vendors in Europe and I think, as it looks right now, that is not an opportunity,” said Börje Ekholm, Ericsson’s CEO, on a call with analysts last month. The substitution of the Nordic vendors for Huawei has not gone as far as they would have hoped. Ekholm warned analysts one year ago about “sharply increased competition from Chinese vendors in Europe and Latin America” and said there was a risk of losing contracts. “I am sure we’ll lose some, but we do it because it is right for the overall gross margin in the company. Don’t expect us to be the most aggressive in the market.”
There are few signs of European telcos replacing one of the Nordic vendors with Huawei, or of big market share losses by Ericsson and Nokia to Chinese rivals. Nokia’s RAN market share outside China did not materially change between the first and second quarters, says Remy Pascal, a principal analyst with Omdia (quarterly figures are not disclosed but Nokia held 17.6% of the RAN market including China last year). Huawei appears to have overtaken it because of gains at the expense of other vendors and a larger revenue contribution from Huawei-friendly emerging markets in the second quarter. Seasonality and the timing of revenue recognition were also factors, says Pascal.
Huawei is still highly regarded by chief technology officers for the quality of its products. It was a pioneer in the development of 5G equipment for time division duplex (TDD) technology, where uplink and downlink communications occupy the same frequency channel, and in massive MIMO, an antenna-rich system for boosting signal strength. It beat Ericsson and Nokia to the commercialization of power amplifiers based on gallium nitride, an efficient alternative to silicon, according to Earl Lum, the founder of EJL Wireless Research.
Sanctions have not held back Huawei’s technology as much as analysts had expected. While the company was cut off from the foundries capable of manufacturing the most advanced silicon, it managed to obtain good-enough 7-nanometer chips in China for its latest smartphones, spurring its resurgence in that market. Network products remain less dependent on access to cutting-edge chips, and sales in that sector do not appear to have suffered outside markets that have imposed restrictions.
Alternatives to Huawei’s dominance have not materialized in a RAN sector that was already short of options. Besides evicting Huawei from telco networks, U.S. authorities hoped “Open RAN” would give rise to American developers of RAN products. That has failed badly.
- Mavenir, arguably the best Open RAN hope the U.S. had, became emblematic of the Open RAN market gloom after it recently withdrew from the market for radio units as part of a debt restructuring. The company has sold its Open RAN software to DISH Network and Vodafone, it has not achieved the market penetration it initially targeted. Mavenir has faced significant financial challenges that led to a restructuring in 2025, significant layoffs and a major shift in strategy away from developing its own hardware.
- Parallel Wireless makes Open RAN software and also provides Open RAN software-defined radios (SDRs) as part of its hardware ecosystem, focusing on disaggregating the radio access network stack to allow operators flexibility and reduced total cost of ownership. Their offerings include a hardware-agnostic 5G Standalone (SA) software stack and the Open RAN Aggregator software, which manages and converges multi-vendor RAN interfaces toward the core network.
Stefan Pongratz of Dell’Oro Group forecasts annual revenues from multi-vendor RAN deployments – where telcos combine vendors instead of buying from a single big supplier – will have reached an upper limit of $3 billion by 2029, giving multi-vendor RAN less than 10% of the total RAN market by that date. He says five of six tracked regions are now classed as “highly concentrated,” with an Herfindahl-Hirschman Index (HHI) score of more than 2,500. “This suggests that the supplier diversity element of the open RAN vision is fading,” Stefan added.
Preliminary data from Dell’Oro indicate that Open RAN revenues grew year-over-year (Y/Y) in 2Q25 and were nearly flat Y/Y in the first half, supported by easier comparisons, stronger capex tied to existing Open RAN deployments, and increased activity among early majority adopters.
Open RAN used to mean alternatives to Ericsson and Nokia. Today, it looks synonymous with the top 5 RAN vendors (Huawei, Ericsson, Nokia, ZTE, and Samsung). In such an environment of extreme market concentration and failed U.S. sanctions, the appeal of Huawei’s RAN technology is still very much intact.
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Omdia’s historical data shows that RAN sales fell by $5 billion, to $40 billion, in 2023, and by the same amount again last year. In 2025, it is guiding for low single-digit percentage growth outside China, implying the RAN market has bottomed out. This stabilization suggests the market may be transitioning into a phase of flat-to-modest growth, though risks such as operator capex constraints and uneven regional demand remain. However, concentration of RAN vendors
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References:
https://www.lightreading.com/5g/huawei-overtakes-nokia-outside-china-as-open-ran-stabilizes-
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Ookla: Europe severely lagging in 5G SA deployments and performance
According to a new joint study from Omdia and Ookla, Europe has had the poorest 5G SA availability and performance among major regions. In Q4 2024, China (80%), India (52%), and the United States (24%) led the world in 5G SA availability based on Speedtest® sample share, markedly ahead of Europe (2%).
The European region also lagged behind its peers in performance, with the median European consumer experiencing 5G SA download speeds of 221.17 Mbps—lower than those in the Americas (384.42 Mbps) and both Developed (237.04 Mbps) and Emerging (259.73 Mbps) Asia Pacific. The interplay of earlier deployments, a more diversified multi-band spectrum strategy, and greater operator willingness to invest in the 5G core to monetize new use cases have driven rollouts at a faster pace in regions outside Europe.
The European Commission has championed measures to accelerate private investment in 5G SA, highlighting network slicing—a flagship capability of cloud-native core networks—as a key potential driver of its broader industrial strategy in sectors such as precision manufacturing, defense and clean energy. Up until this point, high-quality public data examining Europe’s progress in 5G SA—and benchmarking its competitive position relative to other global regions—has been scarce. In its latest annual report, Connect Europe, the trade body representing Europe’s telecoms operators, noted that “there is limited information available about the extent of operators’ rollout of 5G SA.”
Advanced network capabilities enabled by the technology remain stubbornly limited to just a few operators in leading markets such as the U.S., according to the study, while Europe lags behind its peers on several 5G SA performance indicators, “raising concerns about the bloc’s competitiveness in the technology.”
Network operator investment per capita also lags in Europe as per the below chart:
When faced with choices among investments in fiber, 5G RAN, and 5G SA core, the latter frequently loses out, since operators can still launch a “5G” network by leveraging alternative technologies. There is also a lack of 5G SA-compatible devices, especially devices with User Equipment Routing Selection Policy (URSP) technology, which allows a device to dynamically select a slice (or multiple slices) provisioned by an operator. However, only Android 12/iOS 17 mobile devices support that largely unknown technology.
While capital spending on the 5G core transition is now increasing rapidly, European network operators will remain committed to strict cost discipline Based on Omdia’s Q3 2024 quarterly core software market share and forecast, the research firm believes that the global core market revenue from both 4G and 5G network functions will grow with a five-year CAGR of 3.2% between 2023 and 2028. When considering the spending in 5G core software, the forecasted growth with a five-year CAGR during the same period is of 17.0%.
Omdia now forecasts that 5G SA core spending in EMEA will grow with a five-year CAGR of 26.2% between 2023 and 2028. Nonetheless, as a prerequisite, deploying the 5G core also requires a good 5G radio coverage, to avoid a degraded experience where the 5G coverage is limited or nonexistent, and where the user falls back on 4G-LTE or 2G/3G. This means operators must invest in 5G RAN, which is usually considered the highest capex draining activity for an operator. While 5G is known for very high throughput speeds using mid-band (and particularly C-band) spectrum, these bands need to be complemented by sub-GHz spectrum deployment, in order to offer improved in-building and wide area coverage. This rollout has been slow in many European markets, with 5G availability in all countries outside the Nordics remaining significantly lower than that in the United States and China, according to Ookla’s Q4 2024 Speedtest Intelligence® data.
One bright spot is that Europe has made progress on achieving low latency on its 5G networks. In Q4 2024, the average country-wide median latency in Europe was 32 milliseconds (ms) compared to 35 ms in the Americas and 36 ms in Emerging Asia Pacific region.
References:
https://www.lightreading.com/5g/eurobites-europe-behind-on-5g-sa-study
https://www.ookla.com/s/media/2025/02/ookla_omdia-5GSA_0225.pdf
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Analysys Mason’s gloomy CAPEX forecast: “there will not be a cyclical recovery”
Telco capex declined worldwide in 2023, and predictions in end-of-financial year results indicate further declines this year. Analysys Mason warns that a “long decline” in capital expenditure has now started. “There will not be a cyclical recovery,” says one subhead (see below). Analysys Mason crunched a lot of numbers to arrive at this conclusion, processing historical data for about 50 of the largest operators in the world. Importantly, it also looked at the long-term guidance issued by those companies. Capex has peaked partly because telcos in many regions have completed or are near completing a once-in-a-lifetime upgrade to full-fiber networks. Clearly, that’s bad news for companies selling the actual fiber. Operators will continue to invest in the active electronics for these lines, but that represents a “tiny fraction” of the initial cost.
This new Analysys Mason gloomy CAPEX forecast comes after Dell’Oro and Omdia (owned by Informa) previously forecast another sharp fall in telco spending on mobile network products this year after the big dip of 2023.
Figure 1. below aggregates change in capex, excluding spectrum, in 2023 (or FY2023/2024) for 50 of the largest operators in the world, all with annual capex of over USD1 billion in 2023. These operators account for about 78% of telecoms capex worldwide. Of the 42 operators that provided guidance on capex in 2024, 28 forecast a fall. A notable class of exceptions consisted of cable operators and latecomers to FTTP upgrade, but most of the emerging-market-focused operators indicated a decline.
The steepest decline was in North America. The decline was steeper for the three largest mobile network operator (MNO) groups (–18.1%). This was offset by rises in capex by the two large US cablecos, for which upgrades of HFC plant are now an imperative. The obvious reason for the sharp decline is the near-completion of 5G roll-out, although FTTP capex remains flat.
In China, capex was flat overall. This disguises a decline in 5G and fixed broadband capex, which, taken together with transmission, fell 7% in 2023. The delta of capex has gone on what operators call ‘computility’ (compute power in data centers and edge) and capabilities (developing the ability to serve mainly the industrial enterprise). Together these two items now account for about 35% of operator capex.
In Japan and South Korea, capex was also more or less flat (+0.5%). As in China, a high proportion of capex in Japan now goes on adjacent lines of business.
Capex declined by 5.5% in Europe. The European figure disguises the impact of the large number of smaller players in the continent. 5G spending has peaked, but so too has FTTP spending. FTTP spend represents a very high share of capex in Europe (about one half), although this is distributed differently across individual countries. Countries like France and Spain have passed that peak, but even in the UK, a relatively late starter, spend has plateaued. Among operators in emerging markets, the smallest group in absolute capex terms, there was a rise of 8%, steady now for three years running, driven almost entirely by India, and offset by declines elsewhere.
There will not be cyclical recovery of capex:
Operators’ longer-term projections of capex suggest, if anything, steepening declines in capex. Our forecasts indicate that capital intensity (capex/revenue) will fall from around 20% now to 12–14% by the end of the decade. Capex will fall basically because customers do not need more than the 1Gbit/s fibre and unlimited 5G that the current networks are easily capable of delivering, and growth in measurable demand slows every year. This will have the following effects:
•Fall in fixed access spend. Capex on FTTP is essentially a one-off investment in passive assets with very long useful lives. Future capex on upgrades (in effect replacements) of FTTP actives will come at a tiny fraction of this cost. The pipeline of plans for commercial build is running dry, although this is offset by some hefty subsidies for rural build, particularly in the USA. Those cablecos that have not already started will have to brace themselves for programs of replacement of HFC/DOCSIS by FTTP/xPON.
•We expect only limited uplift for 5G SA/5G Advanced. This is in part because some operators will not be able to justify a further upgrade after 5G NSA, in part because of slack demand, and in part because the sums involved will be lower than for the roll-out of 5G NSA.
•6G will not be capex-intensive. There is little appetite in free-market economies without centralised planning (and perhaps not so much even there) for a capex-intensive generational upgrade to 6G. There will be no cyclical uplift.
•There will be more outsourcing, i.e. replacement of capex by an opex line. This occurs mainly in infrastructure, but also in migrations of operations (IT capex) to the cloud. Yet this does not mean that capex is simply shifting from one class of business to another; infra companies exist in a world with similar constraints.
•In these circumstances there is a clear case for capex investment in anything that maximizes the efficient (and sustainable) use of the physical assets as they stand, and unlocks any opportunities that exist in new business-models. This is prominent in many operator outlooks.
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William Webb, an independent consultant and former executive at UK telecom regulator Ofcom, forecasts an S-curve flattening by 2027. In a forthcoming book called “The end of telecoms history,” Webb returns to predictions he first made in 2016 to gauge their accuracy. Using recent historical data from Barclays, he was able to show a close alignment with the S-curve he drew about eight years ago. If this behavior continues, growth rates “will fall to near zero by around 2027, with significant variations by country,” says Webb in his book, giving a sneak preview to Light Reading.
Webb’s broad rationale is that there is an upper limit on daily gigabyte consumption, just as there is only so much the average person can eat or drink. All Webb had to do was assume there will be some future gorging by customers on high-quality video, the most calorific meal for any smartphone. “Once they are watching video for all their free moments while downloading updates and attachments there is little more that they could usefully download,” he writes.
What of future services people do not currently enjoy? Outside virtual reality – which, for safety reasons, will probably always happen in a fixed-line environment – no app seems likely to chew through gigabytes as hungrily as moving images do in high definition. Webb clearly doubts the sort of artificial intelligence (AI) services being advertised by Apple will have much impact whatsoever.
“There may be substantially more traffic between data centers as models are trained but this will flow across high-capacity fiber connections which can be expanded easily if needed,” he told Light Reading by email. “At present AI interactions are generally in the form of text, which amounts to miniscule amounts of traffic.”
“Indeed, if time is diverted from consuming video to AI interactions, then AI may reduce the amount of network traffic,” he continued. Even if AI is used in future to create images and videos, rather than words, it will probably make no difference given the amount of video already consumed, merely substituting for more traditional forms of content, said Webb.
For those confident that data traffic growth stimulates investment, the other problem is the lack of any correlation between volumes and costs. Advanced networks are designed to cope with usage up to a certain high threshold before an upgrade is needed. Headline expenses have not risen in lockstep with gigabytes.
References:
https://www.lightreading.com/5g/ericsson-and-nokia-may-be-stuck-with-skinflint-customers-for-years
Dell’Oro & Omdia: Global RAN market declined in 2023 and again in 2024
U.S. Network Operators and Equipment Companies Agree: 5G CAPEX slowing more than expected
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Dell’Oro: 2023 global telecom equipment revenues declined 5% YoY; Huawei increases its #1 position
Where Have You Gone 5G? Midband spectrum, FWA, 2024 decline in CAPEX and RAN revenue
“The “5G Train Wreck” we predicted five years ago has come to pass. With the possible exception of China and South Korea, 5G has been an unmitigated failure- for carriers, network equipment companies, and subscribers/customers. And there haven’t been any significant performance advantages over 4G.”
U.S. fiber rollouts now pass ~52% of homes and businesses but are still far behind HFC
Fiber optic network deployments have reached a milestone as they now pass more than 50% of U.S. households, according to recent report from the Fiber Broadband Association (FBA) [1.] and RVA Market Research and Consulting. Fiber broadband deployment set a new historical record in 2023, passing nine million new homes at a growth rate of 13% year-over-year. The 2023 North America Fiber Provider Survey, sponsored by the FBA, concluded that 77.9 million U.S. homes were passed with fiber, with nearly 52% of all the nation’s unique homes and businesses passed.
Note 1. The FBA is an all-fiber trade association that provides resources, education, and advocacy for companies, organizations, and communities that want to deploy fiber networks. The FBA’s goal is to raise awareness and provide education about the fiber deployment process, safe worksites, and effective fiber installs.
Image Credit: The Fiber Broadband Association (FBA)
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The last $10 billion U.S. Treasury American Rescue Plan (ARP) funding for infrastructure projects such as broadband networks is being distributed this year. The $42.5 billion in NTIA BEAD funding available over the next few years will significantly contribute to enabling and upgrading communities across America with the high-speed, low-latency broadband necessary for participation in today’s 21st-century society. We are seeing a steady stream of NTIA approvals and expect the first states to make BEAD awards in the second half of 2024.
Here’s how the growth of fiber has risen in recent years compared to coax cable (or hybrid fiber/coax, HFC) and the long history of copper.
“Thanks to this latest surge, fiber lines now pass nearly 78 million U.S. homes, up 13% from a year ago,” Alan Breznick, Heavy Reading analyst and the cable/video practice leader at Light Reading, explained in recorded opening remarks here at Light Reading’s 17th’s annual Cable Next-Gen event. Almost 69 million of those locations are “unique” fiber homes, meaning that about 9 million are passed by more than one fiber provider, Breznick added.
The share of broadband technology is also evolving. While HFC remains the primary way of delivering broadband, fiber-to-the-premises (FTTP) and fixed wireless access (FWA) will continue to make their presence felt in the coming years. Omdia (owned by Informa) expects cable’s share of that mix to drop over the next four years, hitting about 55% by 2028, while fiber’s share is expected to rise to 30% by that time, Breznick explained.
For the cable industry, fiber and FWA are not solely about competition. Many operators are also using FTTP extensively in greenfield deployments and subsidized rural buildouts. They are deploying it on a targeted basis via a new generation of nodes that can support multiple access technologies, including HFC and wireless.
CableLabs has put fiber-to-the-premises on the front burner via a pair of new working groups. A recent survey from Omdia shows that more than one-third of cable operators have already deployed passive optical networking (PON) in some form. That number will “undoubtedly keep rising” thanks to initiatives such as the Broadband Equity Access and Deployment (BEAD) program, Breznick said. Omdia expects spending on next-gen cable technologies to tick up in 2024 and 2025 and then reach a relatively steady annual state through 2029.
Meanwhile, operators such as Mediacom Communications have tapped into FWA to extend the reach of broadband in rural areas. Combined, they demonstrate some of the reasons why the industry has been shedding the “cable” label via rebranding efforts and name changes in recent years.
Cable’s broadband challenge is to grow broadband subscribers as it faces more broadband competition combined with historically low churn and a slow housing move market. “If it feels like an uphill battle for cable, maybe that’s because it is. But that doesn’t mean it has to be a losing battle,” Breznick said. “That’s because the cable industry still has plenty of tricks left up its sleeve.”
Those tricks include the use of next-generation DOCSIS 3.1 (sometimes called DOCSIS 3.1+ or extended DOCSIS 3.1) that can bump up speeds as high as 8 Gbit/s by opening up new orthogonal frequency division multiplexing (OFDM) channels. Some operators, including Comcast, Charter Communications, Rogers Communications, Cox Communications and Cable One, have begun to deploy DOCSIS 4.0 or have put it squarely on their network upgrade roadmaps.
And though cable operators’ network spending is expected to be down in the first half of 2024, vendors are optimistic that the spigots will start to open up again in the second half of the year as operators pick up the pace.
References:
https://www.lightreading.com/fttx/us-fiber-rollouts-reach-tipping-point-but-are-still-far-behind-hfc
Fiber Connect 2023: Telcos vs Cablecos; fiber symmetric speeds vs. DOCSIS 4.0?
Dell’Oro: Broadband access equipment sales to increase in 2025 led by XGS-PON deployments
Nokia’s launches symmetrical 25G PON modem
Dell’Oro & Omdia: Global RAN market declined in 2023 and again in 2024
A new report from the Dell’Oro Group reveals that the global Radio Access Network (RAN) market concluded the year with another difficult quarter, resulting in a global decrease of nearly $4 billion in RAN revenues for the full year of 2023. However, despite these challenges, the results for the quarter exceeded expectations, partly due to robust 5G deployments in China.
“Following the intense rise between 2017 and 2021, it’s clear that the broader RAN market is now experiencing a setback, as two out of the six tracked regions are facing notable declines,” said Stefan Pongratz, Vice President for RAN market research at the Dell’Oro Group. “In addition to challenging conditions in North America and Europe, the narrowing gap between advanced and less advanced operators (e.g. India) in this first 5G wave, compared to previous technology cycles, initially had a positive impact but is now constraining global 5G and broader RAN growth prospects,” Pongratz added.
Additional highlights from the 4Q 2023 RAN report:
- Overall concentration in the RAN market showed signs of improvement in 2021 and 2022, but this progress slowed down in 2023.
- While full-year RAN rankings remained mostly unchanged for major suppliers, revenue shares within the RAN market showed more variability, with Huawei and ZTE enhancing their global revenue shares. Similarly, Huawei and Nokia saw improvements in their revenue shares outside of China.
- The top 5 RAN suppliers based on worldwide revenues are Huawei, Ericsson, Nokia, ZTE, and Samsung.
- Regional projections are mostly unchanged, with market conditions expected to remain tough in 2024 due to difficult comparisons in India. Nevertheless, the base-case scenario anticipates a more moderate pace of decline this year.
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Source: Dell’Oro Group
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Separately, Rémy Pascal of Omdia says that global RAN revenues (including both hardware and software) declined by 11% last year to just over $40 billion. The worst performing region by far was North America, which almost halved, but this should be viewed in the context of a relatively strong 2022.
India and China were been the best performing countries for new RAN deployments. This partly explains why Huawei continues to be the top RAN vendor despite attempts by the U.S. and its allies to prevent that, but as the Omdia table below shows, the Chinese vendor is still doing well in many other regions too. We’re told this table looked pretty much the same last year.
Top RAN vendors by region, full year 2023:
|
North America |
Asia & Oceania |
Europe, Middle East and Africa |
Latin America & the Caribbean |
|
Ericsson |
Huawei |
Ericsson |
Huawei |
|
Nokia |
ZTE |
Nokia |
Ericsson |
|
Samsung |
Ericsson |
Huawei |
Nokia |
Source: Omdia
Omdia expects the RAN market size to decrease by around 5% compared to 2023. That’s an improvement on the 11% 2022-23 decline but still not good news for the RAN industry.
For all the talk of Open RAN, it clearly has yet to inspire significant capex from operators. The same goes for private 5G or programmable networks. Less than halfway through the presumed 5G cycle, spending has stalled and it’s not at all clear what will restart it.
Dell’Oro Group’s RAN Quarterly Report offers a complete overview of the RAN industry, with tables covering manufacturers’ and market revenue for multiple RAN segments including 5G NR Sub-7 GHz, 5G NR mmWave, LTE, macro base stations and radios, small cells, Massive MIMO, Open RAN, and vRAN. The report also tracks the RAN market by region and includes a four-quarter outlook. To purchase this report, please contact us by email at [email protected].
References:
RAN Market Shows Faint Signals of Life in 4Q 2023, According to Dell’Oro Group
https://www.telecoms.com/wireless-networking/global-ran-market-declined-by-11-in-2023
Dell’Oro: RAN market declines at very fast pace while Mobile Core Network returns to growth in Q2-2023
Dell’Oro: RAN Market to Decline 1% CAGR; Mobile Core Network growth reduced to 1% CAGR
https://www.silverliningsinfo.com/5g/ericsson-nokia-and-state-global-ran-2024
LightCounting: Open RAN/vRAN market is pausing and regrouping
Omdia: China’s 5G network co-sharing + cloud will create growth opportunities for Chinese service providers
After building the world’s largest 5G network with 2.3 million 5G base stations by the end of 2022, China is on track add over 600,000 5G base stations and reach 2.9 million by the end 2023, according to new Omdia market research (owned by Informa). A key milestone in terms of China’s co-building and co-sharing 5G networks recently took place in May 2023, through the 5G network collaboration between all the four service providers in China. Under the organization and guidance of the Ministry of Industry and Information Technology (MIIT), the four major mobile operators in China – China Mobile, China Telecom, China Unicom, and China Broadnet, jointly announced the launch of what they claimed as the world’s first 5G inter-network roaming service trial. The service enables customers to access other telecom operators’ 5G networks and continue using 5G services when outside the range of their original operators’ 5G network.
Ramona Zhao, Research Manager at Omdia said: “Omdia expects inter-network roaming to improve operators’ 5G network coverage particularly in rural areas. Driven by better 5G network coverage, 5G will overtake 4G’s leading position and become the largest technology in China’s mobile market by 2026. By the end of 2028, we anticipate 5G will account for 65.1% of the total mobile subscriptions (including IoT connections).”
An advertisement for 5G mobile service at Shanghai Pudong International Airport. Image Credit: DIGITIMES
Omdia deems China as a 5G pioneer in terms of many areas, including technology innovation, network deployment, and 5G use cases. Driven by the increasing 5G adoption, Chinese service providers’ mobile service revenue and reported mobile (non-IoT) ARPU have all achieved year-on-year (YoY) growth in 2022. China Telecom reported an increase of 3.7% in its mobile service revenue; China Unicom‘s mobile service revenue saw a YoY increase of 3.6%; while China Mobile’s mobile service revenue also increased by 2.5% YoY.
Owing to the digital transformation demand from various state-owned enterprises, cloud services are also considered a growing business for Chinese service providers.
“Omdia recommends that Chinese service providers innovate more applications through the integration of cloud and the 5G network. This will be vital to enable the digital transformation of various industries and the acquisition of new revenue streams,” concludes Zhao.
According to a previous GSMA report, dubbed “The Mobile Economy China 2023”, 5G technology will add $290 billion to the Chinese economy in 2030, with benefits spread across industries.
“Mainland China is the largest 5G market in the world, accounting for more than 60% of global 5G connections at the end of 2022. With strong takeup of 5G among consumers, the focus of operators is now increasingly shifting to 5G for enterprises. This offers opportunities to grow revenues beyond connectivity in adjacent areas such as cloud services – a segment where operators in China have recently made significant progress,” the GSMA report reads.
5G will overtake 4G in 2024 to become the dominant mobile technology in China, according to the report. “4G and 5G dominance in China means legacy networks are now being phased out. While most users have been migrated to 4G and 5G, legacy networks continue to support various IoT services. However, some estimates suggest that legacy networks could be almost entirely shut down in China by 2025,” the study reads.
Chinese vendor Huawei Technologies has secured over half of a major contract to deploy 5G mobile base stations for local carrier China Mobile, according to recent reports by Chinese media.
Huawei obtained over 50% of the total of China Mobile’s centralized procurement program in 2023.
The report also stated that Huawei will provide 5G base stations for different frequency bands. The bands ranging from 2.6 GHz to 4.9 GHz will have around 63,800 stations, divided into two projects, while the number of base stations to operate in the 700 MHz band will be 23,100, divided into three projects. ZTE was the second-biggest winner in terms of base stations, followed by Datang Mobile Communications Equipment, Ericsson and Nokia Shanghai Bell.
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Omdia: China Mobile tops 2023 digital strategy benchmark as telcos develop new services
Telecom operators around the world are embracing digital transformation and developing services in new sectors (beyond connectivity) to facilitate that megatrend. Omdia’s Service Provider Digital Strategy Benchmark report, which scores the digital strategies of 12 major global operator, identified the leaders as: China Mobile, SK Telecom, NTT DoCoMo, and Deutsche Telekom. With telecom operators all making a fair amount of noise about digital transformation, it’s useful to have a way of ranking their efforts and cutting through the marketing hype.
China Mobile scored 27.5 points out of a maximum of 35. It scored so highly due to the scale at which it has deployed high-speed broadband and subsequently used that infrastructure as platform to develop new services, Omdia explained.
“East Asian operators account for three of the top-four places in the benchmark, demonstrating that service providers in the region are among the most advanced in the world. China Mobile is showing a particularly impressive speed of change, with digital transformation services now accounting for more than 25% of service revenues,” said Dario Talmesio, Research Director, Service Provider Strategy & Regulation, at Omdia. “China Mobile is rapidly turning itself into a TechCo operator with an array of digital services beyond connectivity,” he added.
China Mobile reported a 30% year-on-year increase in digital transformation revenue for full-year 2022 to 207.6 billion yuan (US$29 billion), while overall telecommunications services revenues came in at CNY812.1 billion ($114 billion), up by 8.1%.
The China state owned telco itself attributed the growth in digital transformation revenue to “the rapid expansion of 5G applications, mobile cloud, digital content, smart home and other businesses,” and talked up its “remarkable results” in that area. “These services have become a key growth driver contributing to a more balanced, stable and healthy overall revenue structure,” it said in its annual results announcement.
SK Telecom’s position at number two in the ranking is based on its drive to reinvest itself as an AI company and its work to develop services in areas including the metaverse and urban air mobility, Omdia said.
When SK Telecom chief executive took the reins just over 18 months ago, he outlined plans to drive a 20% revenue hike between 2020 and 2025 essentially by transforming the telco into an AI and digital infrastructure company. Amongst other things, that meant turning the firm’s ifland metaverse into an open platform, and a year later the telco was able to announce that its metaverse platform had gone global.
It is working with a number of other operators on metaverse content and technology, including Singtel and NTT DoCoMo, the latter also performing well on digital transformation. Fairly generally, Omdia talks up DoCoMo’s strength in technology and digital services.
Omdia also picks out e& – the operator formerly known as Etisalat – for particular mention. The United Arab Emirates-based telco group ranks fifth in the benchmark.
“e&’s strong showing is based on its new strategy, unveiled in early 2022, of transforming itself into a global technology and investment group—a strategy that it is pursuing vigorously,” said Matthew Reed, Chief Analyst, Service Provider Markets, at Omdia.
The UAE telco reorganised itself under four pillars. The first covers its existing telecoms operations, but the second and third, E& life and e& enterprise, are responsible for new digital services and experiences in the consumer and business markets respectively. The fourth is about investment. The firm made many headlines with its decision to adopt e& as its new brand; the rebrand arguably overshadowed the strategic shift. But with that ampersand essentially standing for all the new sectors in addition to telecoms – next-gen technologies, digital experiences, financial services, the cloud, IoT, AI and so forth – it does make sense, and clearly e& is doing something right to find itself scoring 22 in the Omdia benchmark.
Bharti Airtel is ranked seventh in the 2023 benchmark, up from ninth place in 2022 following Airtel’s launch of 5G in India in late 2022 and as Airtel continues to develop its sizeable portfolio of digital services.
ABOUT OMDIA:
Omdia, part of Informa Tech, is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.
References:
https://telecoms.com/522182/east-asian-telcos-ahead-on-digital-transformation/
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Big 5 Event: wireless connectivity use cases for healthcare, network slicing, security and private networks
Emerging use cases for wireless telecommunications technology was discussed at the Big 5G event in Austin, TX last week in a panel session titled, “Future connectivity use cases and the Holy Grail: Private networks, metaverse, 6G and beyond.” The questions addressed included:
- Who is monetizing private networks and what are we learning from their experiences?
- Should telcos move past targeting only large enterprise customers for 5G services?
- When will the metaverse take off?
- How are telcos gearing up for 6G and what are the expectations?
Jodi Baxter, vice president for 5G and IoT connectivity at Telus, described the numerous emerging applications of 5G in healthcare. One example is a connected ambulance project carried out with Alberta Health Services, where, thanks to 5G, doctors can remotely issue authorizations necessary for stroke medication, which needs to be administered within a narrow time window.
Some of the applications developed for the healthcare sector can also be included in telcos’ offerings to corporate customers. Baxter said Telus has included remote doctor and nurse consultations in 5G bundles for small businesses, which can help their staff retention rates. Healthcare companies are also looking at more specific applications, with Baxter citing the example of a healthcare company that would wish to track hip and knee replacements with 5G.
While sustainability is often seen as an unprofitable endeavor, Baxter argued technology can help customers see a return on investment. One of Telus’s projects in this area uses drones and 5G for reforestation.
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Omdia’s research has shown that about a fifth of midsized to large enterprises “want to invest in 5G network slicing in the next two years, but most people cannot find a commercial offer,” said Camille Mendler, chief analyst of enterprise services at Omdia. “[It’s] not there yet, which is a problem, right?” she added. Note that 5G network slicing requires a 5G SA core network, which most 5G service providers have yet to deploy.
Baxter noted that network slicing will be a game changer for security and transportation of critical data. The panel pointed to autonomous vehicles as another potential application that will require its own slice. She also said slicing will be important for ensuring applications from private 5G networks also have a macro capability.
Lori Thomas, senior vice president for strategic engagement and transformation at MetTel, pointed out that a lot of government agencies are currently looking to bring specific functionalities from the private network onto the public network, and make them accessible in edge devices such as laptops and tablets.
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William Britton, vice president for information technology and CIO at California Polytechnic State University, said it is not always easy to figure out how products offered by telecom companies apply to specific use cases. The university has been told to “go elsewhere” by providers when it has approached them about possible 5G applications, as the solutions on offer did not meet requirements, he said.
Speaking about the particular needs of his university, he highlighted the significant demand for bandwidth during limited events, such as course registration, as well as ad hoc scenarios like high data throughput during online gaming events.
A big concern for universities in general is cybersecurity. Britton points out that the education sector has become a massive target for cyberattacks, such as malware and ransomware. Indeed, research suggests that attacks on educational organizations grew by 44% in 2022, while data from endpoint protection firm Emsisoft suggests that the number of individual schools impacted by ransomware attacks also grew.
Security is a major priority for organizations everywhere, not just in the education sector. Thomas points to IoT, where vast amounts of data travel at high speeds, which is particularly attractive for bad actors. Once 5G can be coupled with blockchain, she noted, data security will improve.
One way to look at specific use cases is through innovation labs, with Thomas saying in the short term these can accelerate the time to revenue. She pointed to MetTel’s partnership with SpaceX and VMware, which saw the latter company’s software-defined wide area network deployed over Starlink to bring high-bandwidth communications to remote areas.
Thomas also said demand for more bandwidth was one of the key trends in the public sector. Customers are, according to her, looking at technologies including 5G fixed wireless access (FWA) and satellites to secure it.
A lot of innovation has focused on private networks, but the “real money” lies outside of them, said Mendler. No further details were provided.
Omdia’s Camille Mendler says companies cannot find commercial network slicing.
Source: JLeitner Photography
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Omdia Surveys: PON will be a key part of network operator energy reduction strategies
Omdia (owned by Informa) surveys have found a “very high” number of telcos regarded PON as a key part of their energy savings programs. Omdia’s chief analyst Julie Kunstler said PON technology is fiber-asset efficient, easy to upgrade, and highly secure.
Speaking at a Light Reading webinar Thursday, Kunstler said another large cohort of network operator execs said they believed PON would play some role in their energy reduction strategies. “PON is energy efficient and this is definitely gaining attention.” Kunstler said “a very strong movement” by operators was underway toward next gen PON, in particular XGS PON. “But perhaps more importantly, PONs are also supporting other types of customers and applications.” She also noted PON technology was fiber-asset efficient, easy to upgrade, highly secure and allowed operators to choose when to upgrade. But she cautioned that in many telcos PON faced organizational obstacles because of the belief that it was for consumer services only and because of the silos between residential and business.
Anuradha Udunuwara, a senior enterprise solutions architect at Sri Lanka Telecom, said energy costs had become a bigger concern in the past 12 months following sharp hikes in power tariffs. He agreed that PON “definitely has an advantage… it is passive, so there is no energy consumption there.”
Udunuwara described PON as an “architectural option” that could support FTTX deployment. He said it was a myth about PON that it was for FTTH only. “It’s not confined to any of the variations of FTTX.” He expected that in the long run services would converge on to a single access technology.
“Oftentimes, sales and marketing teams don’t feel comfortable about PON, simply because they don’t understand it,” Kunstler said. “Many believe its point to multipoint topology is for residential only and that it’s simply best effort and there’s no technical ability to support enterprise services.”
“A lot of education is needed within some operators to explain to the sales and marketing team that PON is not just best effort and that you can actually commit to rates,” she pointed out.
“Not all enterprises need point to point. They don’t all need their own dedicated fiber, and many of them really don’t want to have to pay for dedicated fiber.”
Kunstler said selling business services over PON increased the ROI over that access infrastructure. “With 10G PON, you can easily support one gig symmetrical, two gig symmetrical five gig symmetrical and so forth, and 50 GPON, which will be here within a couple of years, can even support more bandwidth.
By using that optical distribution network for more than just residential, operators were already moving to a converged access approach. “You have more revenues over a single access network. You have a single network to upgrade. You have improved optics and you have improved energy savings.”
References:
Dell’Oro: XGS, 25G, and Early 50G PON Rollouts to Fuel Broadband Spending
AT&T to deploy FTTP network based on XGS-PON in Amarillo, TX
ZTE PON ONT obtains EasyMesh R3 certification from WiFi Alliance
Dell’Oro: PONs boost Broadband Access; Total Telecom & Enterprise Network Equipment Markets
Omdia forecasts weaker 5G market growth in near term, 4G to remain dominant
Multiple factors have slowed down the transition to 5G such as lower handset sales driven by cost-of-living crisis and inflation, poor network coverage, low performance gain perception, and lack of 5G specific applications. Furthermore, an increasing portion of mobile connections – approximately 30% – are not handsets and will be slower to convert to 5G (e.g., IoT, connected tablets/laptops, wearables).
Omdia Senior Market Forecaster, Garinder Shankrowalia, said: “5G subscription reporting in 2022 has led us to reduce our 2023 forecast by 7.2% -approximately 150 million subscriptions. We anticipate the industry will regain this loss from 2025, once global market conditions are improved.”
Omdia believes it is important for mobile operators to continue investing in next generation mobile networks to enable the application emergence and the overall digital economy to grow. However, having multiple cellular technologies running concurrently on mobile networks is having an adverse effect on operators whereby launching 5G increases complexity and cost for little return in the short term.
Omdia Research Director Ronan de Renesse said: “There needs to be a ‘net-zero’ approach to network development, removing the old as the new gets deployed. Operators are already starting to move capital from next generation network deployment to 3G decommission projects and digital transformation. Key stakeholders should remain realistic about the prospects for 5G and re-evaluate the business case before moving on to the next step.”
Omdia forecasts 5G will account for 5.9 billion subscriptions in 2027 equivalent to a population penetration of 70.9%.
Another Opinion: 5G Fails to Deliver on Promises and Potential
5G is a big letdown and took a “back seat” at CES 2023; U.S. national spectrum policy in the works
