5G growth in the APAC region was 3x to 4x the size of the incremental LTE growth
A recently published report from Dell’Oro Group revealed that healthy LTE growth and surging 5G investments in the Asia Pacific region added fuel to the Radio Access Networks (RAN) market upswing that began in the second half of 2018.
“After several years of the Asia Pacific region being a drag on the worldwide RAN market, preliminary 2Q 2019 data points indicated positive trends extended into the second quarter, adding confidence that the tides are turning in the region,” said Stefan Pongratz, vice president with the Dell’Oro Group. “In addition to healthy demand for low-band LTE solutions and easier year-over-year comparisons following the ZTE ban last year, surging 5G mid-band deployments in China and South Korea helped to drive the acceleration of the overall RAN market.”
The report showed that the Asia Pacific (APAC) region, including China, comprised more than 80% of worldwide RAN growth between the first half of 2018 and the first half of 2019, and 5G NR growth in the APAC region was 3- to 4-times the size of the incremental LTE upside.
“Preliminary estimates suggest Huawei and Samsung benefitted in the quarter from their respective mid-band positions in China and Korea,” Pongratz commented. “Collectively, we estimate the two vendors recognized revenue for around 0.2 M 5G NR radios between 4Q18 and 2Q19. At the same time, Ericsson has more than 3 million 5G NR-ready radios in the field.”
However, Pongratz also stated, “Even if 5G NR already comprises a double-digit share of the overall RAN market and the number of operators announcing commercial 5G NR networks is increasing rapidly, it is still too early read too much into the 5G NR revenue shares.”
Additionally, according to the report, Samsung and ZTE recorded the largest overall RAN revenue share gains between 1H 2018 and 1H 2019, with the two vendors collectively gaining five points of revenue share in the Asia Pacific region.
“In addition to regional variations and differing revenue recognition methodologies, the increased use of software for non-massive MIMO deployments is complicating the revenue allocation between 4G, 5G, and 5G capable systems,” said Pongratz.
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