Strong 5G NR investment, particularly in China and South Korea, helped the overall RAN market return to year-on-year growth (albeit single-digit) during Q1 2020 after some contraction the previous quarter.
This was one of the key findings from research firm Dell'Oro in its latest report covering RAN markets worldwide.
"Market conditions in the quarter were in many aspects positive, as healthy end-user fundamentals and positive 5G momentum outweighed downward risks associated with the COVID-19 pandemic," said Stefan Pongratz, vice president at Dell'Oro.
According to Dell'Oro, 5G NR comprised between 20% and 40% of the overall RAN market during Q1. Moreover, massive MIMO radio shipments increased four-fold, year-on-year, with the total installed base eclipsing 60 million transceivers. Indoor small cell growth slowed in the quarter, but Dell'Oro maintained that the outlook here remained favorable for full-year 2020.
Behind the headline figures there are some nuances, however. "Within the regions, we have revised our 2020 expectations downward for the European RAN market and adjusted the outlook upward in the Asia Pacific region, reflecting faster-than-expected 5G acceleration in China and South Korea," said Pongratz in an email response to questions from Light Reading.
Neither was he dismissive of the potential threat posed by COVID-19 to disrupt RAN supply chains. "Though COVID-19 had relatively little impact on the RAN market in the first quarter, history shows that significant changes in GDP output could result in RAN fallouts, albeit somewhat delayed," he said.
Even so, ventured Pongratz, "an improved understanding about the importance of access to consistent broadband will ultimately outweigh the downside supply and demand risks due to COVID-19."
Although the "open RAN" factor has yet to have a meaningful impact on the overall RAN market – revenues from open RAN, thinks Dell'Oro, won't exceed 1% of the RAN pie in 2020 – Pongratz expects "the first phase of open RAN to accelerate rapidly in 2020."
Huawei, ZTE making strides
"We estimate the Chinese RAN market advanced at a double-digit pace year-on-year in the quarter, resulting in some share gains for both Huawei and ZTE," Pongratz told Light Reading. "The gap between Huawei and Ericsson/Nokia widened somewhat in the quarter, reflecting Huawei's share gains in China."
In terms of overall RAN rankings, Dell'Oro found no change in Q1 2020 compared with the previous quarter. Huawei is still the leader, followed in descending order by Ericsson, Nokia, ZTE and Samsung.
— Ken Wieland, contributing editor, special to Light Reading