The latest data from analyst firm Dell’Oro reveals a notable decline in revenues for both Open RAN and vRAN in Q2 2023. Despite the firm not disclosing the exact quarterly numbers, an annual update reveals a significant revenue reduction in the first half of this year for Open RAN. This trend signals a potential year-on-year reduction for the first time if it continues throughout the year. The contraction in the Americas and the Asia Pacific region primarily drives this downturn, whereas Europe continues to see growth. The leading Open RAN suppliers by revenue include Samsung, NEC, Fujitsu, and Rakuten Symphony.
Reflecting on this trajectory, Stefan Pongratz of Dell’Oro noted, “After a couple of years where Open RAN revenues exceeded expectations and advanced at an accelerated pace, the current slowdown doesn’t come as a surprise. Projections for 2023 were more tempered, considering that it would take time for the early majority operators to balance out the more challenging comparisons with the early adopters who fueled the initial Open RAN wave.” The current trend shows growth decelerating in the first quarter before declining in the second quarter.
The decline comes at a critical juncture in the hype cycle, raising concerns among stakeholders. The exponential growth seen during the initial stages was bound to slow down eventually, but an outright decline when these technologies still represent a minor proportion of the overall RAN market raises eyebrows. NEC appears to be weathering this downturn reasonably well, in contrast to companies like Mavenir.
It’s worth noting that the overall RAN market is not experiencing significant growth, possibly indicating that these nascent technologies are still marginally outpacing the rest of the market. However, current trends make it challenging to predict if Open RAN and vRAN will eventually command the majority of the overall RAN spend when the 6G cycle kicks in. At this point, Dell’Oro predicts that Open RAN revenues will account for a modest 5-10% of the RAN market this year.