Jimmy Yu and Stefan Pongratz of the Dell’Oro group say that the market was worth $121 billion in 2018 and will be $129 billion in 2023.
“Helping to drive this growth is fairly synchronised growth projections within the application mix, with mobile and fixed revenue projected to both grow at a 1% CAGR [compound annual growth rate] over the forecast period,” they write in a blog previewing the five-year forecasts.
This might seem gloomy, but Dell’Oro notes that it follows five years of contractions in network equipment and services revenue. Growth is expected to improve, say the analysts, buoyed by improving market sentiment for telecom equipment.
“Total network equipment services revenue – including managed service, network rollout service, and consulting service – is projected to grow at a low-single digit growth rate over the forecast period.”
Some sectors within the overall telecoms market are growing much faster than that 1% a year, they note.
They project that the total transport market – including microwave and optical – will grow at an annual rate of 3% a year between now and 2023.
Mobile backhaul will grow at the same 3% a year, while they project that the overall market for radio access networks (RANs) will grow at 2% a year.
Yu and Pongratz write: “In order to cope with mobile data traffic that continues to grow at an unabated pace and flattish revenue trends, operators are balancing their investments carefully between the supply side related challenges and the opportunities from a demand perspective.”
Their need to reduce total cost of ownership “has been a catalyst for the overall 4G to 5G migration acceleration, benefitting not only RAN equipment but also the demand for core, transport, and services”.
They have revised Dell’Oro’s overall 5G infrastructure projections upwards, including their forecasts for 5G RAN and 5G core, “reflecting a more optimistic view about the 5G core market”, they write.
Dell’Oro expects to have updates on the overall telecoms equipment market share in September or October.
