Radio Access Network RAN Market

Market Overview

The global radio access network RAN market size was valued at USD 5.71 billion in 2022. It is estimated to reach USD 11.60 billion by 2031, growing at a CAGR of 8.2% during the forecast period (2023–2031). The increase in demand for mobile broadband services and growth in network densification is expected to boost the global radio access network RAN market.

A radio access network is a key component of a mobile telecommunications system that connects individual mobile devices to the core network infrastructure. It enables wireless communication between mobile devices, such as smartphones, tablets, and IoT devices, and the network operator's infrastructure. The RAN includes various elements, such as base stations, antennas, and associated equipment, that transmit and receive radio signals to establish and maintain communication links with mobile devices. The primary function of the RAN is to provide wireless coverage and ensure reliable connectivity for mobile devices. It consists of multiple base stations strategically located within a specific geographical area, known as a cell. Each base station, known as a Node B or eNodeB in 3GPP standards, is equipped with antennas that transmit and receive radio signals over the air interface. These signals carry voice, data, and other types of mobile communications.

The RAN plays a crucial role in optimizing network resources and managing the allocation of wireless resources to mobile devices. It handles tasks such as radio channel allocation, handovers between base stations as mobile devices move across cells, and managing interference to ensure efficient and reliable wireless communication. Overall, the RAN is a critical component of mobile network infrastructure that enables wireless connectivity and facilitates communication between mobile devices and the core network, enabling voice calls, data transfer, and access to various mobile services.

Market Dynamics

Global Radio Access Network RAN Market Drivers:

Increase in Demand for Mobile Broadband Services

As per the International Telecommunications Union, 70% of the global youth (15–24) access the Internet daily. In addition, in developed countries, 90% of the young population uses the Internet. Mobile broadband subscriptions grew with an annual rate of more than 20% in the last six years and reached 4.3 billion globally by the end of 2017. This huge adoption of mobile broadband services was due to affordable prices. The average subscription price of mobile broadband was 0.7% of the gross national income (GNI) per capita in developed economies.

In contrast, it was 4.3% of the world GNI per capita in underdeveloped economies. Thus, numerous initiatives are being made to expand Internet connectivity, which is getting easier because there are more broadband networks. For instance, the 5G standard network is expected to significantly affect mobile broadband users' growth. Furthermore, early adoption of 5G subscriptions is anticipated to be affected by higher prices. However, prices are expected to drop gradually with the evolution of 5G technologies. This will increase the number of 5G mobile broadband users, thereby fueling the growth of the radio access network market.

Growth in Network Densification

Network densification is an integral part of deploying 5G architecture, which promises massively increased data rates, from megabits per second (Mbps) to gigabits per second (Gbps), and ultra-reliable lower latency, from tens of milliseconds to milliseconds. Successful 5G implementation mainly depends on network densification, which is increased through available network capacity by adding more cell sites, including macro sites, radio access networks, in-building wireless, and small cell deployments. The optimal locations for network densification are generally near urban areas and large venues where there is a higher number of digital users. Network densification is important for 5G as digital users demand faster speed and higher connectivity. This network must deliver a speed ten times faster than 4G while maintaining optimal connectivity. Further, the penetration of digital services, such as autonomous cars and remote surgeries, experiences an increase, which, in turn, boosts the demand for higher connectivity and faster speeds, thus driving the market's growth.

Global Radio Access Network RAN Market Restraints:

Concerns Related to Fiber Backhaul

Deploying fiber backhaul networks for small cells, mainly to support low latency and high data rates, is the major challenge operators face due to the poor availability of fiber networks in many countries. For instance, the UK has the lowest fiber penetration rates. To increase investments in fiber networks, the government of the UK has introduced a five-year relief from business rates on new fiber network infrastructure. Further, in some countries, deploying fiber backhaul is not cost-effective, so operators consider wireless backhaul technologies. A portfolio of wireless technologies, including mmWave, PMP, and satellite, are considered in addition to fiber. This factor is forecasted to hamper the market growth during the forecast period.

Global Radio Access Network RAN Market Opportunities:

Increase in Investments in Smart Cities

According to International Data Corporation, investments in smart city tech are projected to reach $135 billion by 2021. 5G technologies are expected to serve as the foundation of small cell networks that accelerate the development of wireless infrastructure for the future generation in a smart city. Moreover, 5G technologies are expected to spur modern technology innovation and acceptance in smart cities. One of the major hurdles for bringing smart cities into reality has been the need for immense speed and bandwidth to handle vast amounts of data. 5G technologies are anticipated to drive cost savings in smart cities. According to a report published by Accenture 2018, the smart city solutions applied to vehicular traffic management and electrical grid management can considerably save energy usage, traffic congestion, and fuel costs. They can help save up to $160 billion. Growth in investments toward smart city infrastructure is expected to provide significant opportunities for implementing 5G technologies. Thus, this, in turn, is anticipated to create lucrative opportunities for the RAN Market.

Regional Analysis

Based on region, the global radio access network RAN market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant global radio access network RAN market shareholder and is estimated to grow at a CAGR of 10.2% over the forecast period. North America includes countries such as the U.S., Canada, and Mexico. North America is one of the most important regions, as telecom companies in this region are violently working on new technologies. The rise in demand for automation and technological advancements across the region is anticipated to propel the radio access network market growth during the forecast period. The growth of 5G technology in North America is attributed to the extensive adoption of new technologies, such as radio access networks, IoT, and cloud computing. Intelligent devices such as autonomous cars connected automobiles, and devices have greater penetration in this region, owing to an increase in the adoption of 5G technology, which is expected to propel the radio access network market growth.

Europe is anticipated to exhibit a CAGR of 14% over the forecast period. The European market is examined in the UK, Germany, France, and the rest of Europe. Europe is anticipated to witness a high radio access network market growth during the forecast period due to a rise in the adoption of 5G technology across the region. The availability of smart cities and smart infrastructure across the region propels the market's growth. Technological advancements among various industry sectors and the increased purchasing power of residents contribute to the growth of Europe's radio access network market. For instance, Vodafone is deploying its first OpenRAN technology in the UK and Europe. This project is co-led by Vodafone and Intel to build radio access solutions with disaggregated and open software running on general-purpose hardware. This deployment is expected to help operators, allow more vendor flexibility, and make it easier for new vendors to enter the RAN market in Europe.

The market in Asia-Pacific is analyzed across China, Japan, India, and the rest of Asia-Pacific. Growth in telecommunications, networks, data center IT industries, and 5G investments in the Asia Pacific region fuels the radio access networks market in the region. Furthermore, the rise in the adoption of smart technologies in Asia-Pacific creates lucrative opportunities for radio access networks in the region.

The market in LAMEA is analyzed across Latin America, the Middle East, and Africa. The adoption rate of advanced technologies and solutions in various industry verticals is comparatively slow in LAMEA. Factors such as growth in IoT, the demand for advanced technologies in automotive and consumer electronics, and an increase in the adoption of 5G technologies drive the growth of the LAMEA radio access network market.

Segmental Analysis

The global radio access network RAN market is bifurcated into communication infrastructure, technology, and applications.

Based on communication infrastructure, the global radio access network RAN market is bifurcated into small cell, macro cell, RAN equipment, and distributed antenna systems (DAS).

The small cell segment dominates the global market and is projected to exhibit a CAGR of 12.8% over the forecast period. A small cell is a mini base station that breaks up a cell site into smaller pieces, incorporating picocells, microcells, and femtocells, and can be deployed in indoor/outdoor systems. They operate in licensed and unlicensed spectrum ranging from 10 meters to 2 kilometers.

In addition, the smallest unit of small cells is for indoor residential use, and the largest is for urban and rural outdoor picocells. In addition, small cells are deployed in densely populated areas, including shopping centers, sports complexes, airports, train stations, and distributed antenna systems. The deployment of small cells has shifted toward the largest densification that helps to increase the capacity of operator networks across an array of locations. These deployments are anticipated to register significant evolution and be angled toward the building network. Small cells aim to increase the macro cell's edge data capacity, speed, and network efficiency. With the introduction of 5G, small cells are expected to play a crucial role in efficiently delivering high-speed broadband and numerous other low-latency applications. Thus, these factors are expected to propel the growth of the radio access network market.

Based on technology, the global radio access network RAN market is bifurcated into 2G, 3G, 4G/LTE, and 5G.

The 4G/LTE segment dominates the global market and is projected to exhibit a CAGR of 18.2% over the forecast period. 4G technology is growing rapidly due to increased demand for fast data services from individuals across the globe. It establishes faster internet connectivity for connected and smartphone devices, enabling uninterrupted connectivity for streaming videos, movies, and music. 4G provides enhanced network connectivity across various areas, such as buildings, hospitals, campuses, and other large spaces.

Moreover, 4G equipment is used in numerous applications such as virtual presence, navigation, multimedia and video services, and crisis management. In addition, most people use smartphones for entertainment, such as gaming, video calling, and web surfing. These factors require strong connectivity and, thus, drive the demand for 4G networks and equipment.

Based on application, the global radio access network RAN market is bifurcated into residential and enterprise.

The residential segment dominates the global market and is projected to exhibit a CAGR of 12.1% over the forecast period. A radio access network is used in residential areas to connect computers to another computer network; sometimes, it is called an end system. RAN and small cell solutions allow mobile operators to deliver additional network capacity easily, quickly, and cost-effectively with enhanced mobile experiences in residential applications. Smart homes are the key factors driving the adoption rate of radio access networks and small cells across residential applications.

Additionally, the ability of small cells to cover smaller areas with higher bandwidth boosts the growth of the radio access network market in residential applications. For residential applications, small cells implemented in cell towers cost-efficiently provide the home's wireless voice and data coverage. This is a major factor that drives the growth of the global market.

Recent Developments

• March 2023- Huawei Signed a USD 4 billion contract with China Unicom to supply 5G RAN equipment.

• March 2023- Samsung Signed a USD 3 billion contract with China Mobile to supply 5G RAN equipment.