The pandemic remained an ongoing challenge for the telecommunications sector in 2021. Over the course of its march through the turbulent times, Open RAN set its position at the tip of the connectivity spear in Europe, as it gained the support of largest telecommunications operators and became recognised as the key to building a competitive market in Europe. However, if the EU wishes to participate in the Open RAN revolution, with the technology projected to account for 10% of the entire RAN market by 2025, much work has to be done.
#1: Open RAN taking the stage
As 2021 came and went, the crisis of broken supply chains remained its unfortunate theme. It had its silver lining, however, as the appreciation and support for open approach to developing connectivity took over the telecommunications world this year. Open RAN gained global recognition and appreciation, which resulted in a mid-year update of Open RAN revenue forecasts, which went up by 50%, ending up at a projection of up to $15 billions of revenue in this technology branch between 2020 and 2025, according to a recent report by Dell’Oro Group. Analysis pointed to a five-fold increase in Open RAN revenues in Q1 of 2021.
The charge of open solutions in connectivity was reflected in the telecommunications industry’s attitude as well. As 2021 began, the largest European telecom operators, including Deutsche Telekom, Orange, Telecom Italia (TIM), Telefónica and Vodafone committed to supporting the development of the global Open RAN ecosystem and pointed towards it as the Europe's best opportunity to defend and grow its place in the global 5G and 6G industry by signing a Memorandum of Understanding, mentioning the crucial value of supplier diversification in Europe as per EU 5G Security Toolbox guidelines.
Here to stay
By November, Europe’s leading telecom operators issued a comprehensive analysis of the European Open RAN landscape and shared their recommendations for its adoption with policymakers, proving their recognition of the open model and rightly arguing that it grants opportunities for new and traditional providers and fosters innovation across industries. Importantly, it has been clearly stated that Open RAN will come, whether Europe decides to embrace it or not, which seems to be the case globally. Most likely, the process will only pick up speed in 2022. Recommendations were made for the policymakers to ensure high-level political support for Open RAN and incentivise Open RAN development in the EU, while engaging in international partnerships.
Open RAN has sealed its position as a cost-effective, secure, energy efficient way to foster innovation and maintain competitiveness. Europe, however, must pick up the pace if it wishes to benefit from its growing potential, as the issue of the EU Open RAN market not being quite vast and mature remains.
Catching up with the stake
Indeed, Open RAN has become universally appreciated and recognised - as seen in the telecom operators’ approach and in the EU officials-issued guidelines. The European Commission’s 5G Supply Market Trends report included promotion of European digital autonomy and technological sovereignty by supporting collaboration between new and traditional vendors and a strong approach towards open specifications in the 5G ecosystem as one of the goals. However, analysis of the European Open RAN landscape points towards a simple conclusion: Europe needs to pick up the slack and provide its 5G providers and upcoming start-ups with a regulatory ecosystem promoting their growth, as it finds itself in a less-than-perfect situation of non-self-sufficient and undersized Open RAN market.
The recent study has shown the presence of just 13 major Open RAN players in Europe. While there are some promising exceptions, such as IS-Wireless, the only identified end-to-end Open RAN software provider from the region, the European organisations are not seldom at a relatively early stage of development, not quite yet securing commercial Open RAN contracts. Quite alarmingly, the number of parties active in the Open RAN market in Europe is much lower compared to other regions, with 57 major Non-European entities active and progressing in their sales at the same time. Europe has some catching-up to do.
2022 to bring more of the same
With Open RAN estimated to account for over 10% of the entire RAN market by 2025 according to the Dell’Oro Group (while estimated to make up for 1-2% of it in 2021), the upcoming 2022 is bound to stay on course of Open RAN’s growing significance, as the world turns towards the open approach to developing its telecommunications ecosystems. Industry, policymakers, investors alike have recognised the potential of the technology and it is up to national and regional authorities to use it to the fullest in their recovery, resilience-building, and efforts for achieving security and autonomy. Taking a careful look and supporting Open RAN may just be the next new year’s resolution for all those involved in connectivity around the world.
