LightTrends Newsletter

Disaggregated cell site gateways cross a winding road but are here to stay

December 2022

LightCounting releases its Disaggregated Cell Site Gateways Report

Initiated by Facebook (renamed Meta Platforms on 10/28/2021) and currently led by Telecom Infra Project (TIP), Telefónica, and Vodafone, disaggregation covers all telecom network elements from access to transport and core and this report solely focuses on disaggregated cell site gateways (DCSGs).

“Like open RAN, the elimination of vendor lock-in and the abundance of NOS software options are the primary drivers for adopting DCSGs. Unlike open RAN, there is no Rakuten Mobile to drive volumes and as a result, the DCSG market is not reaching the level all disaggregation proponents would like to see,” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

Our quarterly discussions with many NOS software and white box hardware players involved in the expanding DCSG ecosystem led to the following findings:

  • After a nice ramp up in 2020, and flatness in 2021, we expect the DCSG market to remain flat again this year due to the lack of fresh Tier 1 contracts that have yet to materialize, and a few lingering issues including COVID-19 flare-ups and lockdowns, supply chain constraints, Broadcom’s Qumran lead times, and API integration problems.
  • For many European CSPs, the need to find hardware alternatives to Chinese vendors is a secondary driver.
  • NOS software vendors are mushrooming and by far outnumbering the white box hardware suppliers. However, IBM acquired Volta Network in 2021 and Infinera bailed out of the market at the beginning of this year, citing diminishing momentum. In addition, software can also be disaggregated and sold through components.
  • Established telecom network equipment vendors are not worried about the onslaught of NOS suppliers because they also provide their own NOS running on cheap hardware.
  • DCSG market inhibitors include new 5G RAN architectures that provide various split options, the integrated access and backhaul (IAB) feature of 3GPP Rel. 16, and an increasing need for integration, narrowing the DCSG opportunity to large Tier 1 CSPs with enough resources.
  • All inputs from all vendors and CSPs with DCSG rollout plans taken into consideration, we cut our 2022 forecast and our cell site-based model produced a flat YoY sales forecast, including hardware and software, by year-end; growing to almost half a billion dollars by 2027 at a CAGR of 49%; hardware sales account for 10% of total sales.

Until we get more insights into the impact of 5G reaching ubiquity, our DCSG forecast is a CSG replacement. In the long run, we expect 5G use cases to dictate the DCSG addition rate, along with the 2nd 5G rollout wave or cycle.

About the report:

LightCounting’s Disaggregated Cell Site Gateways Report analyzes DCSG architectures and implementations, including its emerging ecosystem, and tracks white box hardware units and sales, and software sales, all broken down by regions including North America, Europe Middle East Africa, Asia Pacific, and Caribbean Latin America; a few regions include country breakdowns.  It includes the total number of cell sites worldwide and a 5-year forecast. As this market is just emerging, it is too early to publish vendor market shares.

Companies covered in this report include more than a dozen NOS and white-box hardware specialists as well as established telecom network equipment vendors such as Cisco, Ericsson, Juniper Networks and Nokia Networks.

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