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February 13th, 2020

Ever since consolidation in 2013, the Radio Access Network (RAN) market has been dominated by three incumbent vendors: Huawei, Ericsson and Nokia. However, this status quo will start to be disrupted in 2020 as the roll out of 5G accelerates and as new entrants deploy open RAN technologies.

Open RAN deployments today are mostly greenfield builds or emerging market trials. However, major Mobile Network Operators (MNOs) are showing increasing interest. For example, NTT DoCoMo in Japan recently launched pre-commercial 5G trials using open RAN fronthaul interfaces on part of its network, while Vodafone hit the headlines last December by announcing plans to issue an open RAN RFI within two years to replace equipment at 150,000 of its European cell sites. Whether this happens or is just a PR gimmick to ruffle the Big Three, remains to be seen.

Regardless, the transition to open RAN will be a marathon and not a sprint. MNOs have already started to select their initial 5G radio partners. As a result, it is highly unlikely that any of the RAN market disrupters will land a significant share of any major MNO’s initial 5G build, even from Vodafone.

Opportunities:

In the short term, the best opportunities are likely to be in-building and private networks, particularly after 5G NR hardware becomes available in late 2020.

“In-building is probably one of the best markets to launch open RAN as high capacity requirements are not needed” said Gareth Owen, Associate Director at Counterpoint Research. “The private enterprise network market is another, as many enterprises, particularly industrial companies have an urgent need to invest in cellular systems, and the most capital efficient way of doing this is by means of an open, virtualized RAN, not a proprietary stack.” he added. Enterprises now have access to unlicensed spectrum for the first time, for example, the CBRS band in the US, and are not necessarily reliant on operators anymore.

In the case of MNOs, the most likely opportunity for open RAN vendors in the short term are for smallish greenfield network builds or in emerging markets where 4G and 5G is still in the planning stages. Several MNOs in developed countries are also looking to deploy open RAN in rural markets. However, new opportunities will emerge as 5G matures and MNOs start thinking about upgrades and enhancements to their networks.

Roll-out schedule, key issues:

Counterpoint believes that there is still significant research, lab testing and trials to complete, plus a few major challenges to be overcome, before widescale open RAN adoption happens. Although there will be some limited commercial roll outs during 2020, big scale open RAN deployments are probably at least 18-36 months away.

Key issues at present include scalability and interoperability. Can an open RAN network provide the capacity needed for widespread deployment, particularly with outdoor macro networks or at big indoor venues, and can MNOs interchange vendors’ software and hardware and still achieve the same performance? There is also a concern that the performance gap between x86-based commercial-off-the-shelf (COTS) servers and proprietary hardware is not converging as much as initially expected.

“To date, most open RAN network trials have focused on less demanding markets and it is only now that MNOs are starting trials in dense urban areas such as London, that provide much more challenging, real world conditions,” said Peter Richardson, Research Vice President at Counterpoint Research. “With regards to interoperability, at this stage vendors are just testing their own equipment to see if it complies with open RAN standards, rather than testing interoperability with each other’s products. However, the recent opening of a common test and integration centre in China, with further centres to follow elsewhere, is a positive step which should ultimately resolve this issue.” he added.

Although MNOs are looking for vendor diversity – especially with increasing restrictions on using market leader, Huawei’s products – equipment designed to open RAN specifications needs to mature before the technology can be deployed in commercial networks, at scale, as MNOs cannot risk exposing their customers to unreliable infrastructure. To succeed, new entrants will need to demonstrate that they are reliable partners, have good long-term prospects and ideally should be in a position to offer end-to-end solutions.

“The Race to Open RAN Will Be A Marathon, Not a Sprint!” is a three-part report which provides in-depth insights to the state of the open RAN market, as follows:

Part 1 – provides a detailed overview of the technology of open RAN and discusses key technical issues, including standards development, RAN fronthaul interface options, etc.

Part 2 – provides a detailed outline of the open RAN ecosystem with a focus on the most innovative software providers and fronthaul technology developers, including AltioStar, Mavenir, JMA Wireless, Parallel Wireless, Radisys, Dali Wireless, Phluido Technology, etc.

Part 3 – provides an overview of current pilots and pre-commercial trials (both greenfield and legacy networks) plus up-to-date plans about the open RAN activities of major MNOs.

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contact:

Gareth Owen

Counterpoint Research
press(at)counterpointresearch.com