The demand for fifth-generation network solutions is growing, resulting in ever-faster growth of the 5G market1. There are signs of major shifts in the way networks are built. The growing importance of Open RAN and increasing demands for deployments of private networks for industrial, academic, and public purposes will shape the near future of mobile networks.
#1: Open RAN gaining momentum
The conversation on the future of mobile networks will be driven by Open RAN. While the entirety of the radio access network market is far from being taken over by the open model, Open RAN is now the fastest-growing segment in this sector2. Over the past couple of years, it has been expanding at rates far exceeding previously made estimates. Open RAN revenues are expected to account for as much as 15 percent of the entire RAN market by 20273. The status of Open RAN as the leading trend in mobile network development is expressed by its recognition among both the private sector and public officials around the world. According to a major survey of 119 global network operators, over 80% of them confirmed including Open RAN in their technology roadmaps, with more than half of operators looking to deploy Open RAN networks in the next two years4. Some of the largest telco players, including Vodafone Deutsche Telekom, Orange, Telecom Italia, and Telefónica have already announced being “ready for Open RAN by 2025”5. This comes just over two years after declaring Open RAN as a preferable model for building networks for European customers and calling upon EU and national policy-makers as well as the private sector to give high priority to Open RAN as the go-to model6. And in fact, governments do take action to boost Open RAN deployments. The UK government serves as a great example. It has implemented a dedicated strategy aiming to support Open RAN network deployments, foster innovation, diversify the 5G supply chain, and make it more resilient. The plan has been backed by ca. 300 mln GBP so far7. Similar steps, including 300 mln EUR worth of funding directed mostly at the private sector have been taken in Germany as well8.
The trend going to dominate the nearest future of 5G will be the growing role of Open RAN, receiving more appreciation due to cost reduction, security reasons, avoidance of the risks related to vendor lock-in, and the incentive for greater market competition and innovativeness.
#2: The world looks to capitalize on private networks
An important trend is also the advent of private 5G networks. Industry, academia, and local governments around the world realize the opportunity private 5G offers to advance far-reaching digital transformation. While just over one-third of industrial private networks use the 5G technology, the private 5G market is expected to grow at a staggering 48,2% a year, reaching a volume of 129,6 bln USD by 20329.
Private networks, granting their owners independence from the infrastructure of traditional operators are driving the automatization and robotization of industrial processes, marking the rise of Industry 4.0, and providing citizens with access to the latest 5G-based public services in line with the idea of smart cities and smart villages. All of this, alongside the ability to tailor the private networks to the individual needs of their owners in a specific area and the chance they grant to provide connectivity to areas previously excluded from access to mobile networks, make the private 5G a focus point of a growing number of private and public sector players globally.
#3: Central Eastern Europe to become a new hub for mobile networks development
The Open RAN revolution inherently fosters greater competition in the mobile networks industry and allows for more diverse and often highly specialized players to participate in the market. Thanks to that, new hubs of telecommunications research and development are appearing around the world. Central Eastern Europe appears to be a prime example of just that.
In recent years, the region has been making progress in this direction. Realizing the benefits of new-generation networks, governments of CEE countries are introducing regulations enabling the development of private 5G networks. Industrial and academic private 5G networks have been deployed in countries such as Croatia, Czech Republic, Estonia, Hungary, Latvia, Slovakia, Slovenia and Poland. The leading 5G ecosystem forum in CEE Europe - 5G Techritory - takes place in Latvia annually. Riga is also the home of the region’s first Open RAN 5G laboratory, set up at the Riga Technical University and delivered by the Polish company IS-Wireless.
It appears that the region has the ambition, and capabilities and is gaining momentum to become a new, significant global hub of telecommunications development, keeping up with the global trends or even shaping them. It should, and likely will, become of interest to investors looking to get ahead of the curve and tap into the energy and potential of the up-and-coming market.
References
- https://www.futuremarketinsights.com/reports/5g-technology-market
- https://www.5gamericas.org/wp-content/uploads/2023/11/Open-RAN-Update-Id.pdf
- https://www.delloro.com/advanced-research-report/openran/
- https://content.hclindustrysaas.com/c/gsma-mobile-world-live-survey-report?x=wn5yyu&_pfses=jsn3QaHNkv7qJy1K4QySMkNL
- https://www.capacitymedia.com/article/2bb6obhqx5avgyejn4740/news/big-five-mobile-operators-ready-for-open-ran-by-2025
- https://newsroom.orange.com/europe-urged-to-act-now-to-build-open-ran-ecosystem/
- https://www.gov.uk/government/publications/uk-open-ran-principles/open-ran-principles
- https://basic-tutorials.com/news/germany-300-million-euros-in-government-support-for-open-ran/
- https://gsacom.com/paper/private-mobile-networks-june-2022-summary/
