Open RAN, which has been touted as one of the most significant trends to transform the telecom industry, took off in ways no one ever expected in 2020. The consolidation of the RAN supply chain and a ban on certain suppliers forced mobile operators around the globe to get creative and open up their network to Open RAN faster than any other new technology in the past. This was possible by Open RAN driven innovation, a promise of TCO savings of up to 40%, and enablement of supplier diversity with the disaggregation of hardware and software components to avoid vendor lock-in.
From more Open RAN hardware to large Open RAN footprint buildouts and supporting brand-new use cases like urban deployments, here are twelve Open RAN trends we predict for 2021.
#1: 2021 is the “disillusionment” in the Open RAN hype cyclE
2021 will be a year of “disillusionment” as there will be more trials, more deployments, and more findings of challenges and opportunities that are faced with deploying Open RAN. Open RAN will be deployed more widely for new use cases like very dense urban. The vendors and operators that will be doing the learning through tests and deployments will improve the technology and be in a better position to benefit as the market grows.
Source: Gartner
And that is where our next prediction comes in when we look at the adoption model of Open RAN.
#2: Crossing the chasm into the mainstream market
The challenge for Open RAN today depends on how an open RAN ecosystem is sustained through the technology’s adoption curve. The early market adoption of the last five years included innovative companies and early adopters bringing Open RAN to actual deployments. In 2021, we expect new operators’ adoption of the technology and the whole ecosystem evolving Open RAN into the mainstream market.
Once the technology is a part of the mainstream, we will see more deployments. This is what our next prediction for 2021 covers.
#3: Large scale deployments and urban deployments of Open RAN
There will be more large-scale deployments of hundreds of sites in brownfield networks. As we know, many service providers have been steadily adding Open RAN to their already established 2G, 3G, and 4G mobile infrastructure. Many carriers around the globe will be continuing their work aggressively deploying Open RAN to expand their 2G, 3G, 4G footprints and modernize their networks to be more competitive in the next five years, ensuring their overall network infrastructure is Open RAN, not just 5G. Proven in rural, Open RAN will be deployed in urban in 2021 with large-scale urban Open RAN deployments happening in 2022.
#4: Expanded ecosystem, beyond just hardware and software suppliers
To meet Open RAN deployment demands, more players will be joining the proverbial party. In addition to software and hardware players, we will see more system integrators and tower companies jumping in to support Open RAN as integrators or hosts. This will help to define new business and deployment models.
More critical is how an open RAN ecosystem is sustained through its market adoption curve. Today we have the innovators and possibly early adopters on board. But there is a chasm between these and the majority of operators buying this. True multi-vendor open RAN will require sustained investment from innovative operators and the building of strong partnerships and ecosystems between vendors.
#5: More Open RAN hardware from RUs to Massive MIMOs supporting 7.2 split
In 2021, we will see more hardware availability, especially supporting the 7.2 split for macrocells deployments where split 7.2 (eCPRI/Open Fronthaul) for communication between an on-site O-DU and O-RUs is the best option. Why? O-RAN interfaces come in where 3GPP interfaces don’t exist. A requirement of vendors supporting split 7.2 will ensure vendor diversity and interoperability going forward and will allow the mixing and matching of RUs with CU and DU software that will be deployed on an x86.
Source: Parallel Wireless
For small cell deployments, split 7.2 is good for dense deployments in building or where plentiful cost-effective fiber is available, but there will be also interest in split 6, where the fronthaul throughput demands are less.
Considering this, we believe more mobile operators will require their All G Open RAN solutions to support O-RAN 7.2 split. As we know, 2G and 3G will be here for a while, so learning from the past, MNOs will want to deploy a true Open RAN platform when modernizing their legacy systems - which is only possible when RUs and software are able to run over 7.2 radios.
And this where our next prediction comes in.
#6: O-RAN support for 2G, 3G, and 4G
As more and more operators use Open RAN to modernize their networks, hardware and software vendors will be required to make Open RAN solutions available over 7.2 split radios. With steadier ramp-up to 5G consumer adoption, and therefore, slower-to-realize increases in revenue for MNOs, reducing overall network cost will be top of mind for mobile operators - and that includes 2G, 3G, and 4G deployments, expansions or modernization. The strategy of modernizing or expanding legacy networks with Open RAN will improve economics, but supplier resilience can be only guaranteed with commonly supported interfaces (7.2 in this case).
What do we see as the mobile operator’s “insurance policy” for RAN vendor diversity? Deployment of 7.2 compliant O-RAN architectures for legacy networks. Being able to run ALL G software over 7.2 Open RAN RUs won’t be a choice; it will become a requirement. A fully O-RAN compliant 2G, 3G, 4G is needed to broaden any 5G Open RAN deployment at scale when the time comes.
This is what our next prediction covers.
#7: Open RAN will be mostly deployed for 2G, 3G and 4G in 2021
PricewaterhouseCoopers (PwC) notes that while device penetration has stalled at 4% for 5G enabled devices, it expects the market will hit a tipping point in 2023 (!), where 5G devices will be more accessible. Before 2023, Open RAN will be used to modernize legacy cellular networks. The value of 5G will become increasingly mainstream in the next few years when Open RAN technology and the supply chain will be more established and matured. So far, many operators have failed to get any tangible revenue from 5G. In the near term, many operators will continue to evolve their 5G capabilities, but a full-grown standalone 5G Open RAN technology implementation will take longer.
Known as Release 17, the schedule now anticipates completion in 2022, with a freeze in March 2022, followed by coding protocols frozen and stable in June 2022. That is why we see that OpenRAN deployments in 2021 will be mostly for brownfield 2G, 3G, and 4G networks.
#8: Open RAN security
Now more than ever, service providers are focused on their RAN TCO and are relying on Open RAN more and more as their infrastructure of choice. And as the Open RAN market is maturing, security is not just a part of the conversation heading into next year, it is a part of every single deployment or trial by default. Open RAN will enable intelligent and secure path control and traffic-steering based on the application, in rural and urban environments.
#9: CI/CD fuels edge computing and gets paired with Machine Learning (ML)
Continuous integration and continuous development (CI/CD) will fuel edge computing, and mobile operators will start pairing it up with ML to improve site automation. A recent report stated that edge computing will drive approximately $7 billion in revenue by 2025. While as much as two-thirds of this revenue will accrue to the cloud players, mobile operators will play important roles in deploying and hosting RAN sites and providing connectivity to end users and businesses.
In their Predictions 2021 report, Forrester said, “Until now, edge computing was promising but still developing. In 2021, new business models will emerge that facilitate the deployment of edge in production.”
And this is where CI/CD will come in. CI/CD won’t just be in the telecom data center anymore - it will be enabled to push software updates to the edge, to enable seamless and remote upgrades of Open RAN sites. As a result, this CI/CD trend will push along the ML trend in 2021. Forrester predicts that public cloud spending will slow in 2021 in favor of edge computing spending, and this is where we see ML coming in and being explored to take over some of the manual tasks like drive testing, helping not only reduce the labor cost but also to create powerful algorithms to speed up any site adjustments and changes. In the long term, we predict that automation and artificial intelligence will change the way mobile operators respond to customer and network problems before the end-user even knows there is a problem. In the short-term, gains and developments will start happening in 2021.
#10: Role of the Cloud and DU/CU deployment
In 2021, as there will be more deployments, the answer to what to distribute and what to centralize will be addressed on a case by case basis. As DU functionality is real-time, it will be always co-located with RUs on site. There is no real benefit of placing CU functionality, which is near-real-time, in the data center, and right now many of the Open RAN deployments co-locate DU/CU software functionality on the same x86 server that is shared between multiple RUs on site. In theory, CU software can be hosted in a public cloud, and that could be an option for urban deployments.
#11: In protected markets, Open RAN will thrive
This trend is fueled by recent supplier bans, and in those protected markets we’ll see Open RAN flourishing faster and picking up even more steam in 2021. The UK government recently unveiled a series of projects designed to push the use of Open RAN to increase operator supply options, as it set a deadline of end-September 2021 for the last installations of Huawei 5G equipment. Rip and replace funding has been approved by the US government, so we will see an approved supplier list created in 2021 and we predict to see Open RAN suppliers, hardware and software, on that list. We also predict that other countries will impose similar bans, encouraging the Open RAN supply chain to avoid duopoly dictated pricing.
#12: Deployment cost will drive Open RAN adoption in emerging markets
We already see commitments from large operators like MTN, Orange, and Vodafone to use Open RAN to bring coverage in developing markets. Those deployments will be accelerating in 2021. We will see Open RAN used in emerging markets for any new 2G or 3G or 4G deployments: vendor choice, lowest TCO, easy upgradability - will help emerging market MNOs to bring connectivity to more end users. In addition, it will help them to realize network ROI much faster - and that is why Open RAN will become a leading technology in developing regions in 2021 and beyond.
In summary, there are many more operators looking to add Open RAN technology to their production networks in 2021, including AT&T, BT, Deutsche Telekom, Dish Network, NTT DoCoMo, Orange, Reliance Jio, SK Telecom, Telus, TIM, Turkcell, Verizon, Vodafone, MTN, Orange, Etisalat and many other major operators around the world.
That’s likely why industry analysts are becoming much more bullish about the prospects for the Open RAN market.
Dell'Oro Group predicts that by 2024, operators will spend somewhere north of $3 billion on Open RAN products, which is a double-digit share of the market in the next five years. By 2026, ABI Research predicts that for public outdoor networks, sales of Open RAN products will reach $40.7 billion, or 45% share. RAN Research, part of Rethink Research, is expecting Open RAN to “account for 58% of total RAN CAPEX (Open RAN hardware, software, and services) spending at $32.3 billion and to be deployed at 65% of all sites by 2026.”
By 2026, ABI Research predicts that for public outdoor networks, sales of Open RAN products will reach $40.7 billion, or 45% share. They also see OpenRAN approaching economics of scale in the next few years.
Source: ABI Research
RAN Research, part of Rethink Research, is expecting Open RAN to “account for 58% of total RAN CAPEX (Open RAN hardware, software and services) spending at $32.3 billion and to be deployed at 65% of all sites by 2026.”
Omdia's forecast on Open RAN has been raised significantly in the last few months. They now forecast Open RAN to see a year on year growth of 250% in 2020 to become a $3.2B market in 2024.
Source: Omdia
Though numbers vary between analyst firms as we can see, the future of Open RAN looks very hopeful for sure in the next five years, and 2021 will lay a good foundation for that future across the globe.
