Huawei, Ericsson and Nokia continued to lead a rapidly slowing radio access network (RAN) market that Dell’Oro Group noted had “faded” more intensely than expected during the second quarter and is heading an overall revenue drop for the full year.

Dell’Oro Group’s latest research found the RAN market in Q2 slowed at the most dramatic pace in nearly seven years, hitting that sales wall much faster than expected. VP Stefan Pongratz placed that wall’s creation at the feet of the North American market.

“It is tempting to point the finger at data traffic patterns, 5G monetization challenges and the odds stacked against an economy struggling with persistent levels of elevated inflation,” Pongratz wrote. “Although these are, of course, important factors, we attribute the poor performance in the quarter to the clouds forming in North America. Alongside challenging 5G comparisons, the decline was amplified by the extra inventory accumulated over the past couple of years to mitigate supply chain risks.”

Ericsson and Nokia posted disappointing Q2 results undercut by North American operators slashing their 5G spend. Both cited inventory digestion by North American operators as a significant impact on Q2 sales.

Nokia CFO Marco Wiren stated North America revenues dropped 40% during the quarter, “a result of declines across all business groups as inventory digestion continued and [communication service providers] reevaluated their spending plans.”

Ericsson cited similar spending cuts from North American operators as core to its 9% year-over-year drop in Q2 revenues.

Huawei was more cryptic on its numbers, stating it had navigated its “new normal” of geopolitical headwinds during the first half of the year to a degree of financial success.

Vendors did highlight strong RAN growth in India through the first half of the year due to that country’s telecom operators rapidly building out their 5G networks. However, analyst firm LightCounting noted, “for vendors with heavy exposure to 5G RAN, softness in North America was only partly offset by growing demand in India.”

Vendors also don’t except that India tailwind to continue.

“Three-hundred-and fifty-five-percent growth is not something that you should expect to continue forever,” Nokia CEO Pekka Lundmark said during the vendor’s Q2 earnings call. “It has been an incredible growth period in India. The investments continue but we would expect there to be the moderation in the second half, and the overall result, I guess, will be that 2023 will be an exceptional year in India for sure. We will see some normalization in 2024.”

Specific to vendors, Dell’Oro Group reported that Huawei, Ericsson, Nokia, ZTE and Samsung were the top five RAN revenue generators through the first half of 2023.

Huawei rode strong sales outside of North America to reach its highest quarterly RAN revenue share in three years during the second quarter. Dell’Oro Group put that share in perspective by stating Huawei’s Q2 RAN revenue share outside of North America was “as large as Ericsson and Nokia combined.”

Nokia continued to gain RAN revenue share through the first half of the year, recording the largest share increase between last year and the first half of 2023.

Those relatively strong results came at the expense of Ericsson and Samsung, both of which Dell’Oro Group said lost RAN revenue share between last year and the first half of this year.

The analyst firm continues to forecast the global RAN market will post lower overall revenues for all of 2023 compared to last year. That sentiment has been echoed by vendors, which all hinted at a potential recovery beginning next year.

“We expect a gradual recovery toward late in 2023, and then improve in 2024,” Ericsson CEO Börje Ekholm told investors during the vendor’s most recent earnings call.