The recent 6G report from Dell’Oro Group, authored by Ray Sharma, sheds light on crucial trends and obstacles faced by the Radio Access Network (RAN) industry. Following a period of rapid revenue growth between 2017 and 2021, the RAN market is now experiencing a consistent yearly decline. This downturn is expected to persist until the emergence of 6G technology, which is projected to become commercially viable around 2029. Operators and stakeholders are navigating this challenging landscape, balancing current financial pressures with the need for future investments in next-generation technologies.
Current Market Dynamics
RAN Market Decline and Investment Skepticism
A primary theme in the report is the widespread skepticism surrounding the substantial investments required for new technologies. Despite more than $2 trillion invested in 4G and 5G infrastructure between 2010 and 2023, operators have seen little change in revenue trends. This skepticism has led to cautiousness among operators regarding further investments in both 5G and upcoming 6G technologies. The initial high expectations of 5G and its relatively limited impact on revenue growth have further fueled this apprehension, making operators wary of repeating similar experiences with 6G.
The report provides several insights into the future dynamics of the RAN market. Notably, total RAN revenues are expected to trend downward until approximately 2029. However, the outlook post-2029 is more optimistic, with 6G RAN revenues projected to surge and potentially reach $30 billion by 2033. Another critical finding is the anticipated dominance of sub-7 GHz and centimeter-wave (cmWave) macros in the 6G ecosystem by 2033. This projection indicates a shift in the technological landscape, requiring operators to adapt their strategies to remain competitive and financially stable.
Spectrum Strategies and Capacity Management
Stefan Pongratz, Vice President of RAN and Telecom Capex research at Dell’Oro Group, emphasizes the necessity for operators to refine their spectrum strategies to effectively manage various data traffic scenarios. The base case scenario presented in the report assumes a deceleration in the growth of mobile data traffic, enabling operators to improve their capital intensity ratios. This slowdown will further exert downward pressure on the RAN market, challenging operators to optimize their investments while preparing for future demands.
As data traffic continues to grow, albeit at a slower pace, the need for increased capacity will eventually become critical. Operators will need to leverage larger spectrum bands and existing macro grids as cost-effective solutions to meet this demand. This approach will require a balanced strategy that takes into account current financial constraints and the eventual need for enhanced capacity and coverage. The report suggests that careful cost management and strategic planning will be essential for operators to navigate the current market conditions and prepare for the transition to 6G.
Preparing for 6G
Balancing Financial Pressures and Future Investments
The overarching trend highlighted in the Dell’Oro Group report is the importance of operators balancing current financial pressures with future technology investments. The transition to 6G will necessitate a nuanced approach, requiring operators to carefully manage their resources while planning for the deployment of new technologies. This balance will be crucial as operators seek to maintain financial stability while positioning themselves for future growth in a highly competitive market.
Operators must also consider the future role of 6G in the broader telecommunications landscape. The potential for significant market growth post-2029, as forecasted by the report, underscores the importance of strategic investments in 6G. By optimizing their spectrum strategies and preparing for the eventual need to increase capacity, operators can better navigate the complexities of the transition to 6G. This preparation will involve not only technological advancements but also a keen understanding of market dynamics and customer demands.
Strategic and Cost-effective Approaches
The recent 6G report by the Dell’Oro Group, authored by Ray Sharma, offers insights into pivotal trends and challenges confronting the Radio Access Network (RAN) sector. After a phase of rapid revenue growth from 2017 to 2021, the RAN market is now seeing a steady annual decline. This downward trend is anticipated to continue until the arrival of 6G technology, expected to be commercially viable around 2029.
In this interim period, operators and stakeholders face a tough environment as they manage existing financial strains while also preparing for the future. Their strategic decisions are crucial, balancing between optimizing current operations and investing in next-generation technologies. The 6G rollout is poised to be a transformative event, potentially revitalizing the market and presenting fresh opportunities. Until then, the industry must navigate through this challenging period, making smart investments and strategic choices to remain competitive and lay the groundwork for future advancements.
