5G technology adoption and the cool, robust applications it enables such as IoT, Industry 4.0, autonomous driving, telehealth, robotics and more continue to drive Open Radio Access Networks (RAN) along with the promise of seamless network deployments and upgrades at lower costs. And the COVID-19 pandemic has made the need for access to broadband connectivity even more urgent.
Open RAN networks will cost effectively enable All Gs – 2G, 3G, 4G and 5G and are the future of wireless broadband. According to Dell’Oro Group, cumulative Open RAN revenue from 2020 to 2025 could be as high as $15 billion, with Open RAN revenues accounting for more than 10% of the overall RAN market by 2025.
As more and more Mobile Network Operators (MNOs) turn to Open RAN for trials and deployments, our predictions for Open RAN in 2022 include a growing ecosystem:
1) The Radio Access Network (RAN) ecosystem multiplies
Open RAN, the movement in wireless telecommunications to disaggregate hardware and software, and to open interfaces and reduce costs is here to stay. With Open RAN and the “virtualization” it brings, operators are enabled to run software-based network functions on standard commercial-off-the-shelf (COTS) servers. With non-proprietary, open interfaces MNOs can use one supplier’s radios with another’s servers — something previously not possible.
The benefits of Open RAN for MNOs include a broader, best-of-breed ecosystem of hardware and software vendors which enables flexibility and increased competition, leading to lower total costs of ownership (TCO) and innovation in the telecommunications industry. For subscribers, Open RAN enables a consistent high quality user experience which exceeds performance expectations, enabling robust applications even during high peak hours and network overload.
As Open RAN implementations continue to grow, the ecosystem of Radio Access Network (RAN) providers is expanding. However, legacy RAN providers according to Deloitte are still controlling 80% of the market. MNOs want greater flexibility and more diversity in their supply chain to reduce costs and drive innovation.
2) More U.S. government incentives for volume builds and open interfaces
In 2022 and beyond we are anticipating more and more funding from the U.S. Government to support volume builds of the RAN ecosystem so that operators will benefit from economies of scale and competitive pricing. The U.S. Federal Communications Commission (FCC) promotes the benefits of Open RAN to support 5G networks and beyond.
Open RAN as the architecture to build a 5G network in the U.S. will ensure a secure and vibrant supply chain, enabling wireless broadband access in both rural and urban locations.
More government incentives for volume builds will also help to ensure that the U.S. leads in 5G deployments which are based on open interfaces and architectures.Governments and regulators in the U.S. and across the globe have been investing in telecommunications equipment including Radio Access Networks and beyond, driving a broader ecosystem of suppliers. The US House of Representatives recently passed the $1 trillion infrastructure bill which has the potential to impact cybersecurity, telecom, infrastructure, hyperscalers, and enterprise IT inside and outside of the United States. However, a recent estimate from the Competitive Carriers Association and CostQuest has determined that the additional cost to ensure access to ubiquitous 5G for all Americans – and not just those who will be covered by currently planned private investment – is $36 billion.
In April of 2020, the US Department of State announced the 5G Clean Path initiative, which restricts the use of untrusted vendors in the transmission, control, computing, and storage equipment of all 5G mobile traffic entering or exiting American diplomatic systems at home or abroad. As a result of these government mandates, expanded government funding initiatives and MNOs demanding more choices, the radio ecosystem is set to expand.
Inland Cellular, the first operator that is currently running a live commercial Open RAN network in the United States, explained that the reasons why they selected Open RAN a few years ago was to expand their wireless 4G network in Idaho and Washington State. Inland Cellular confirmed that Open RAN enabled flexibility and more functionality, in addition to enabling them to build a scalable, cost-effective, and interoperable wireless network. Inland also commented that, Open RAN provides better functionality at a much lower cost as there are no upcharges for additional features.
3) Growing number of hyperscalers and edge computing
Hyperscalers provide cloud, networking, and internet services at scale by offering organizations access to infrastructure. Today’s hyperscalers include Google, Microsoft, Facebook, Alibaba, and Amazon to name a few. These large companies are mainly dominating cloud services and are continuing to grow.
Edge computing is a distributed computing framework that brings enterprise applications closer to data sources such as IoT devices or local edge servers. This proximity to data at its source can deliver strong business benefits, including faster insights, improved response times and better bandwidth availability.Almost two thirds of operators with plans for edge computing have announced deals with Amazon, Azure, or Google. For example, AT&T is partnering with Azure, Dish selected Amazon and many other operators have similar partnerships underway.
By both delivering the Open RAN management software, and hosting the RAN network software together, public cloud providers could become very valuable partners to the operators. Keep in mind though that real-time telecommunication transactions must be at the cell site where non-real time transactions can be in the cloud.
4) Open RAN Deployments in urban environments continues to grow
Open RAN provides operators with more authority and freedom to integrate the latest innovations, reduce costs and eliminate inefficiencies.
In fact, reductions in the RAN equipment cost will significantly help the bottom line of wireless operators in urban environments as they struggle to cope with the challenges of ever-increasing mobile traffic and flat revenues. Analysts’ projections of a 5G macro-cell deployment with open architecture show prices falling by 50% until 2022, whereas it will only fall by 30% if it is built traditionally with proprietary hardware and software. This 20% difference equates to hundreds of millions of dollars in the overall Total Cost of Ownership (TCO) and will help mobile operators extend investments and become more profitable. Open RAN is the key to cost effectively deploying next-generation mobile network infrastructure enabling All Gs – 2G, 3G, 4G and 5G in urban markets. In summary, Open RAN is the future, enabling wireless state-of-the-art, intelligent, efficient RAN networks to be deployed faster and at lower costs, thus helping MNOs to deliver leading edge broadband services across the U.S. and the globe, enabling economies and improving lives.
Stay tuned for our next Open RAN predictions article on technology trends in 2022 and beyond.
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