Four Insights from Open RAN Transformation Virtual Event

In October, Keysight hosted a virtual event on the unfolding Open RAN transformation. The event included presentations on the future of Open RAN and mobile network operators' plans for O-RAN deployment, demonstrations on how to overcome key challenges including how to perform conformance for O-RAN distributed unit (O-DU) and central unit (O-CU) combinations, benchmark O-RAN systems with real user equipment (UE), and integrate fronthaul networks from 4G to 5G New Radio (NR), and an expert panel on O-RAN conformance and interoperability testing.

Dell'Oro's industry analyst Stefan Pongratz was first up on stage, so to speak. Stefan explained how Dell'Oro sees three broad architectural tracks in the radio access network (RAN) market that aim to address supply and demand challenges:

• Distributed RAN vs. centralized RAN
• Dedicated RAN vs. virtualized RAN
• Proprietary RAN vs. Open RAN

The first insight Stefan shared was that the RAN market has only grown at a compound annual growth rate of 1% over the past 20 years, yet mobile data traffic has increased by nearly 1000 since the introduction of the first smartphone in 2007. These trends, combined with the need to do more with less for both operators and network vendors, increased the need for research and development (R&D) resulting in a highly-concentrated market and creating the three tracks mentioned above.

Another key finding from Dell'Oro's Open RAN research is that while the motivations for adoption vary across the ecosystem, market concentration is a common theme. 80% of the RAN infrastructure market revenue is in the hands of the top three network vendors and 90% is held by the top five. 25 to 30 companies share the remaining market revenue. The architectural shifts, new use cases, and trends towards private wireless and fixed wireless access offer various opportunities on the demand and supply side of the market.

Figure 1. RAN revenue share of the top three suppliers. Source: Dell'Oro

In his presentation, Stefan also talked about where Open RAN would be more likely to succeed. Currently, Open RAN is experiencing success in greenfield networks in Japan, the U.S., and Germany, but the bulk of the Open RAN market opportunity lies with existing networks. The market has yet to cross this chasm, but data suggests it has started to move in this direction. Brownfield operations in Japan, for example, are transitioning from proprietary RAN to Open RAN rapidly.

The Open RAN movement has come a long way in just a few years. The shift from proprietary RAN to Open RAN took off in 2020 with commercial deployments and the broadening of the movement. Network vendors are reporting stronger pipelines and operator commitments are on the rise. Dell'Oro estimates that 85% of the top 20 wireless network operators are deploying, committing, or considering investing in Open RAN. Moreover, ecosystems are growing, partnerships are forming, and governmnents are getting more involved, which will likely drive the Open RAN movement forward.

However, not all Open RAN are the same. The uptake differs by region and operator. In some cases, operators are only incorporating some aspects of Open RAN while others have a full vision from the start. There are also risks involved, which Stefan detailed in his presentation. Open RAN is often viewed as a magic architecture that will level the playing field, but the reality is that it is more of a first step to open the door. The architecture needs to be underpinned by competitive and comprehensive RAN technologies. Network vendors and operators require integrated solutions to accelerate the development, integration, and deployment of O-RAN compliant equipment.

View the event on demand for more insights about the Open RAN market, challenges ahead, and solutions. You can also learn more about Keysight's portfolio of O-RAN solutions, Keysight Open RAN Architect (KORA), here. And for more information about Keysight's 5G solutions, please visit Keysight's 5G Solutions webpage.