Telecom, pay TV revenues growing but RAN revenues flat for a decade

Author: EIS Release Date: Nov 16, 2023

Worldwide spending on telecommunication and pay TV services will reach $1.55 trillion in 2023, an increase of 3.0% over 2022, according to IDC with inflation being the primary driver.
The geographic regions seeing above-average forecast revisions are the Middle East and Africa (MEA) and Latin America. This is mainly a consequence of hyperinflation happening in countries such as Turkey, Uganda, Egypt, and Argentina, where it has become normal to see quarterly ARPUs (average revenue per user) growing by more than 50% on a yearly basis.
On the other hand, expectations for the telecom services market in Western Europe have been lowered slightly primarily due to a worsened economic environment in a few key countries, including Germany.
IDC believes this is the first sign of a new market force emerging that will put the current growth rates under pressure and slowly bring them down toward the end of the forecast period.
Regional Telecom Services Revenue and Year-on-Year Growth (revenues in $US billions)
Global Region 2022 Revenue 2023 Revenue 2023/2022
Americas $575 $594 3.3%
Asia/Pacific $486 $499 2.6%
EMEA $447 $461 3.1%
Grand Total $1,509 $1,554 3.0%
Source: IDC Worldwide Semiannual Services Tracker – 1H 2023
Telecom and pay TV revenues growing 3% CAGR but RAN revenues flat for a decade
In many countries, telecom operators were allowed by regulators to increase their tariffs (often applying a Consumer Price Index model), resulting in healthy service revenue growth on an annual basis. In other countries, however, this move drove the accelerated migration of customers to cheaper tariff packages and cheaper operators, so the value growth rates were much lower than the nominal tariff increases.
A third group includes countries such as Italy, where the competitive situation did not permit operators to do any tariff adjustments. And among a fourth group of countries, mainly the developing countries in Eastern Europe and Africa, tariff increases were prevented by the populations’ low purchasing power.
An analysis by type of telecom services confirms that the well-known trends continue despite the changes in top-line forecasts. Mobile is and will remain the largest segment driven by the growth in mobile data usage and machine-to-machine (M2M) applications, which are offsetting declines in spending on mobile voice and messaging services.
The fixed data services segment will also grow driven by the need for higher bandwidth services. Spending on fixed voice services will fall over the forecast period as rapidly declining TDM voice revenues are not being offset by the increase in IP voice.
The traditional Pay TV market will decline slightly over the forecast period due to the growing popularity of video on demand (VoD) and over the top (OTT) services, but these services will remain an important part of the multi-play offerings of telecom providers across the world.
After growing at a 2% CAGR in the 4G era, global RAN (Radio Access Network) revenues are projected to increase at a 1% CAGR  between 2020 and 2030, says Dell’Oro.
The assumption is that RAN revenues peaked in 2021 and will continue to trend downward before picking up momentum in the outer part of the forecast period.
Forecasts are:
Cumulative 2020-2030 RAN revenues are projected to surpass $0.4 Trillion
Macro RAN deployments will dominate the first 6G wave
Cloud RAN is expected to play a leading role from the start with 6G
Small cells will comprise ~15% of the 2030 RAN market