The market research firm cited a higher-than-expected starting point for the Open RAN and vRAN markets, as well as improved momentum
Dell’Oro Group has revised its forecast for near-term Open RAN and virtualized RAN (vRAN) projections upward. According to the firm’s Vice President and Analyst Stefan Pongratz, the increased forecast reflects the market’s higher starting point and improved momentum. Pongratz predicted that Open RAN revenues will approach $20 billion over the next five years and account for approximately 15% of the 2026 RAN market.
“The Open RAN movement continues to trend in the right direction,” said Pongratz. “At the same time, we have three separate Open RAN waves right now and they are not all moving at the same pace — greenfields and early brownfield adopters are deploying Open RAN aggressively while the remaining brownfields, which also make up the largest part of the market, remain more cautious navigating this transition.”
Virtualized RAN decouples hardware and software, allowing network functions to typically run on a proprietary technology stack to exist as software workloads using commodity or custom hardware. Open RAN considers the same but adds in modularity wherein hardware and software from multiple vendors can interoperate. In doing so, Open RAN promises to end vendor lock-in and lower OPEX for CSPs, and in that way, increase their revenue. In fact, according to a 2022 Wind River report, Open RAN has the potential to deliver up to 30% TCO savings for operators.
Dell’Oro projects that Open RAN investments within the forecast period will be “dominated” by the Asia Pacific and North America regions. It was also predicted that Open RAN macros will drive the majority of the O-RAN capex during this timeline, accounting for more than 90% of the market.
Further, due to improved momentum, vRAN projections have been revised upward, as well. Dell’Oro also pointed to data suggesting the gap between virtualized central unit (vDU) and virtualized distributed unit (vDU) implementations will likely be smaller than initially expected as an additional reason it updated its forecast.
“Risks remain broadly balanced. On the one hand, more operators are embracing the movement. At the same time, more operators and vendors are now questioning if Open RAN will boost competition and lower prices,” the firm said in a statement.
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