The telecoms recession continues to metastasize

Telecoms analyst firm Dell’Oro reports that the Q1 2024 mobile core network (MCN) market declined by 10%, echoing the gloom surrounding the RAN sector.

Scott Bicheno

May 23, 2024

3 Min Read

An especially worrying component of this data is the observation that the 5G MCN market growth rate continued to decelerate in the quarter. This would seem to indicate that, less than halfway through its presumed cycle, 5G investment is drying up. A total of 51 MNOs around the world have now commercially deployed 5G SA networks, with that total rising by just two in the first quarter.

“The four-quarter rolling average has developed an ominous downward trend for three quarters as economic headwinds tighten their grip on the market, moving into negative territory in year-over-year growth rate in 1Q 2024,” said Dave Bolan of Dell’Oro. “This suggests that the downward trajectory will last at least one more quarter after the market high in 1Q 2023 falls out of the four-quarter rolling average. In addition, the 5G MCN market, based on the four-quarter rolling average, has now decelerated for five quarters in a row.

“Inflation has impacted the ability of some Mobile Network Operators (MNOs) to raise capital, and it has also impacted subscribers when it comes to upgrading their phones to 5G. Many MNOs have lowered their Capex plans and announced that they have fewer than expected 5G subscribers on their networks; which limits MNOs' growth plans. As a result, we are lowering our expectations for 2024 from a positive growth rate to a negative one.”

Late last week, Dell’Oro issued a press release titled ‘RAN Market Still a Disaster’. Analysts are far less inclined towards hyperbolic headlines than us hacks, so their use of emotive terms such as ‘disaster’ tends to catch the eye. The justification for such intemperate language was an estimated decline of up to 30% in the RAN market, which marked its third consecutive quarter of double-digit contractions.

“It's difficult to find a silver lining in the first quarter,” said Dell’Oro’s Stefan Pongratz at the time. “We've been monitoring the RAN market since the year 2000, and the contraction experienced in the first quarter marked the steepest decline in our entire history of covering this market.

“In addition to the known coverage related challenges that the market is dealing with when comps in the advanced 5G markets are becoming more challenging, there are now serious concerns about the timing of the capacity upgrades given current network utilization levels and data traffic growth rates.”

While the cost of money will always be an underlying macro factor, both analysts point to lower-then-expected data consumption and, probably as a consequence, demand for 5G subscriptions as the reason operators can’t see much point in spending money on 5G kit. As Light Reading observes, this is especially worrying for Ericsson and Nokia, who have been hoping operators will be forced by sheer weight of data traffic to resume spending in the second half of this year.

In terms of year-on-year declines, Q1 2024 could well represent the nadir, but that’s only because this telecoms recession only really got started in Q2 2023. Both Dell’Oro and Omdia have downgraded their full year RAN market forecasts to around -8% as a result of the Q1 numbers, while we haven’t yet seen any forecasts for the smaller MCN market.

The CEOs of Ericsson and Nokia must already be racking their brains to find some positive spin for next quarter’s numbers, especially since the pent-up demand they have been counting on has gone AWOL. But operators don’t just buy network kit – there’s a whole software and services ecosystem dependent on them that must also be feeling pretty vulnerable right now. This would be a great time for some of those mythical 5G novel use-cases to finally reveal themselves.

About the Author(s)

Scott Bicheno

As the Editorial Director of, Scott oversees all editorial activity on the site and also manages the Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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