Two of the biggest challenges that networks face today is the cost to deploy and maintain networks due to vendor lock-in and network complexity, as networks need to support 2G, 3G, 4G and eventually get ready for 5G. These challenges become especially apparent in low ARPU markets, rural areas, or developing markets like Latin America, APAC or Africa. That is why we see Open RAN adoption happening faster in those regions, as Open RAN innovation gives those operators the ability to choose any RAN vendor thus reducing the deployment cost in those challenging deployment areas.
In fact, Open RAN was first deployed in rural areas. Why you might ask? Not only because it was an area where operators could test new and yet unproven technologies, but also from an investment and maintenance standpoint, rural areas are the most challenging ones. If a solution is low-cost enough for rural markets and can economically support the very limited number of users, it will have even better TCO in urban markets. If rural sites can be upgraded remotely with a software push to the edge, maintenance cost will be reduced as well and will also make any urban deployments easy to upgrade.
It is important to emphasize here that 2G & 3G networks are not going away anytime soon. Some countries are switching off 2G, some are switching off 3G, but the majority of the world will still have a combination of 2G, 3G, 4G, and 5G networks for years to come. The GSMA mobile economy report 2020 mentioned that 5% of the global population will still use 2G in 2025. That amounts to over 360 million users. 4G will continue to be the dominating technology in 2025 as well.
In emerging economies, specifically across Africa, parts of Europe and Latin America, many operators still utilize substantial 2G and 3G investments. The migration from legacy networks to 4G and 5G networks will be a key challenge in those regions since the telecom industries there are still emerging, and an implementation of 4G and 5G could prove very costly because it will require running old legacy non-IP networks and new all IP (4G and 5G) at the same time. In many of the regions across Africa and Latin America, the replacement rate of cellular devices is much lower than in other regions of the world. As mobile phones that are compliant with legacy 2G and 3G tend to be used more in emerging regions, the operators require a solution that can support both 2G and 3G while simultaneously preparing for the deployment of faster 4G and 5G networks. Open RAN solutions that support 2G, 3G, 4G and 5G will cost-effectively enable connectivity in those markets by simplifying installation and providing technological flexibility and sustainability.
For each operator, the landscape of technologies they must support is very heterogeneous; one solution will not fit all scenarios. A sustainable mobile broadband will become widely available with Open RAN, reducing the cost structure and delivering flexibility by design to sustainably evolve and adapt the network to user demand: 2G and 3G today, 4G and 5G in the future.
While mobile operators’ interest in Open RAN technologies has been growing for a couple of years, Vodafone has been on the journey for more than five years. Vodafone was the first operator to move the technology out of a lab environment and into a field trial in their emerging markets and rural areas (Turkey and DRC). Vodafone didn’t hold back on its intentions to use Open RAN to help expand its supplier base. CEO Nick Read said at the end of 2019 that the operator was “pleased with trials of OpenRAN and are ready to fast track it into Europe, as we seek to actively expand our vendor ecosystem.” Recently, Yago Tenorio, Vodafone's head of network strategy, confirmed that "we have had trials taking commercial traffic for about a year now," and "It is a 2G, 3G and 4G trial and it is live and the KPIs (key performance indicators) are really good and in some cases better than the incumbent."
Source: Vodafone
The African continent poses a unique commercial and moral challenge for telecom service providers. A large number of the African population is still out of the telecom network - it remains one of the most under-penetrated regions in the world, with the primary 2G network yet to reach over 110 million people (as per the GSMA report). In addition, the Average Revenue Per Unit (ARPU) continues to be extremely low, and telecom service providers have a tough challenge listing out their priorities. And this is where Open RAN can help and is set to play a vital role in the connectivity race as the regions that are connected are largely dependent on legacy infrastructure with 2G and 3G, and 4G still in its infancy.
African MNOs need to optimize their previous G investments, especially 4G, as those deployments were delayed due to the ability of end users to pay more for 4G services. At the same time, MNOs in Africa are looking to Open RAN for any new 2G, 3G or 4G deployments - vendor choice, lowest TCO, easy upgradability - will help African MNOs to bring connectivity to more end users. In addition, it will help them to realize network ROI much faster - and that is why 4G-based on Open RAN will become a leading technology in Africa in the years to come as more users get access to 4G devices.
An All G OpenRAN solution was attractive to MTN because of easy upgradability to any G, allowing MTN to keep building 2G networks in areas untouched by wireless connectivity, while at the same time continuing to allocate resources and time to expand their 3G or 4G networks with the same investment. MTN is set to deploy 5,000 OpenRAN sites across their 21 operations.
Orange has recently joined the Open RAN movement and is planning on starting its Open RAN journey in Africa with the goal to roll it out across all of their operations.
And although there are capabilities to deploy 5G, Africa-based operators will require the ability to run 5G alongside their existing 2G, 3G and 4G networks. At present, that can only be solved with either erecting new infrastructure or deploying Open RAN, which can run alongside existing infrastructure. It’s a no brainer really.
Latin America is a large geographical region with many areas that are extremely difficult to be reached and concentration of infrastructure and population in large metropolitan areas. During spectrum actions, the government puts expectations on MNOs to cover the majority of geographical areas, not just by population. It presents a challenge to regional MNOs to cover entire countries, as the cost of installation and maintenance of traditional RANs is high. Couple it with the need to support a variety of technologies to support 2G, 3G, 4G and 5G in the future, and no wonder Open RAN is catching on like fire throughout the region.
Telefonica’s initiative Internet para Todos (IpT) aims to connect the approximately 100 million unconnected in the LATAM region to enable economic inclusion. And they are embracing Open RAN to achieve this ambitious goal.
IpT was formed in early 2019 with the mission to bring faster internet access and its benefits to everyone - giving more people a voice, strengthening communities, and creating new economic opportunities. IpT has deployed 650 sites since May 2019, covering over 450,000 customers, with a 3G and 4G rollout in rural Peru. IpT is developing a new business model by establishing a wholesale model and enabling partnerships with local communities. Open RAN technologies allow IpT to reduce the cost of deployment in areas where current technologies are cost-prohibitive. These include cloud-like Open RAN architecture, automated network planning, and a combination of optimized fiber and microwave networks.
As of today, IpT Peru has deployed hundreds of new sites in Peru and is the largest Open RAN deployment in the world.
The technology brings much more flexibility and agility to the deployment and management of a telco access network. The Open RAN architecture creates a multi-vendor, multi-operator, open ecosystem of interoperable components for the various RAN elements and from different vendors.
However, openness and virtualization also come with incremental levels of complexity that must be managed to capture the value and not create new problems for operators. With this objective, IpT Perú, Telefónica and their Open RAN vendors have implemented an operating model built on the principles of the data center with continuous integration and continuous delivery (CI/CD) - bringing even more data center native principles in the network. That enterprise embraced model of CD/CI, which we will cover in our next installment, helped accelerate taking new functionalities to the market faster, in an easy and automated way. This approach has helped to establish a new operating model to reduce IpT Perú's OPEX, to be able to manage much faster product lifecycles and to speed up the deployment of new applications for coverage and capacity scenarios.
The initiative makes use of new approaches to network deployment, using Open RAN and RAN sharing technologies. “We have to operate our network more efficiently and at a lower cost than traditional operators,” commented Renan Ruiz, IpT’s CTO at TIP Summit 2019. “We need low cost, scalable and disruptive technology that allows us to overcome the challenges we are facing in the rural areas of Peru.”
The partnership demonstrated that infrastructure projects based on Open RAN, combined with new business models, can connect communities and serve as a model for other areas of the world.
Source: Parallel Wireless
As part of the new partnership, IpT Peru will connect rural communities throughout Peru by enabling any mobile network operator to use its 3G and 4G infrastructure to deliver high quality retail mobile communication services, said the partners, who are hoping the success of the venture in Peru will pave the way to replicate this type of business model in other countries in Latin America and the Caribbean region.
More and more operators see Open RAN as the only alternative to get them into the driver’s seat to deploy and manage their networks. In our next installment, we will take a closer look how Open RAN adoption is happening in the developed countries.