Three reasons ORAN maturity is arriving today

While operators once argued that open RAN ‘is relatively immature in its development,’ the promise of the technology is not in doubt, and with maturity comes rising confidence. With operators across Europe initiating deployments, and many more committing to roadmaps and test programmes, it’s clear that ORAN is set to become a vital part of RAN in the near future.

There are three clear indicators of ORAN’s trajectory: industry buy-in, incentivisation and real-world deployments. Let’s look at each of these in turn:

1: Industry buy-in

Despite not being a new concept, ORAN is rapidly becoming “too hot to ignore”. Excitement around its prospects, and projections that ORAN investments will reach tens of billions of dollars by 2026 are fuelling debates and initiatives around the world.

For example, research company Dell’Oro expects that total operator spend on ORAN technology will exceed $5 billion by 2025. And looking further ahead, ABI Research has predicted that this figure will reach $30 billion by 2030. This investment is not on operators alone – ISPs, utility businesses and cable operators are also affected by this upward trend. 

These kinds of predictions have had repercussions across the industry. In January 2021, major European service providers – Deutsche Telekom, Orange, Telefónica and Vodafone – signed a Memorandum of Understanding (MoU) on “The Implementation of Open RAN Based networks In Europe” that signalled their commitment to deploying open, disaggregated 5G radio access networks. The MoU also lobbies for state funding and support to kickstart rollouts and foster a regional ORAN R&D sector. These industry giants followed this up in May 2021 with their Open RAN Technical Priorities targeting 2022 mass deployments. For a ‘relatively immature’ technology, the industry buy-in is large - and only looks set to get larger.

2: Incentivisation

Governments around the world are aware of the benefits of encouraging open RAN to promote diversification, and this trend has already been accelerating. Earlier this year, the UK government announced a number of incentives for mobile operators to adopt ORAN technology, targeting 25% of the RAN to operate on ORAN technologies by the mid-2020s. Spearheaded by OFCOM, the grant is providing £100m for labs, an initial £150m in R&D and trials (plus tax credits) and £600m for deployment spend, which amounts to a significant cost saving on initial ORAN deployment costs. UK operators have also been mandated to remove Huawei 5G kit by 2027, and this means many operators already have a clear reason to upgrade to the whitebox hardware required to enable ORAN. 

With a robust support structure now in place, operators who are not ready to take advantage of the incentives risk missing out and losing ground to the competition.

3: Real-world deployments

The final (and possibly most powerful) indicators of ORAN’s trajectory are its existing deployments, as well as the fact that most vendors have been developing ORAN equipment for over a decade. In 2016, an engineering-focused and collaborative methodology called TIP (Telecom Infra Project) was formed for building and deploying global telecom network infrastructure, with the goal of enabling global access for all. Since then, TIP has also engaged with Spanish operator Telefonica to connect a live Enterprise ORAN pilot to its network this year.

Other examples of real-world deployments include Vodafone, which is actively deploying ORAN trials in countries like Ireland, Turkey, South Africa and Mozambique. Meanwhile, Vodafone UK is in the process of deploying 2,600 test sites with support from Mavenir. And NTT DoCoMo has worked with Fujitsu, NEC and Nokia on multi-vendor interoperability for its 4G and 5G base station, using ORAN Alliance specifications, while Italian network operator TIM (working with JMA Wireless) has deployed multi-operator, open, virtualised RAN in multiple locations across multiple operators, in both outdoor dense city networks and large-scale venues such as stadiums.

The flurry of activity and excitement around ORAN should not come as a surprise. Our 2021 research report with Heavy Reading reveals that there are three key reasons operators are pursuing Open RAN initiatives:

●     Cost savings vs closed solutions from a single supplier (33%)

●     Faster roadmap and ability to introduce new and innovative features (28%)

●     Reduction in the reliance on a single vendor or small number of vendors brings opportunities to differentiate service offerings and increase return on investment (23%)

Meanwhile, mobile operators were even clearer. When asked what the most important business justification for open RAN was, half of the respondents from the largest operators (>$5 billion) selected “Faster roadmap and ability to bring in new features” or “New service and monetization opportunities”, demonstrating the level of confidence in this growing technology.

There has never been a better time to get involved with ORAN, and we predict this technology will reach maturity far faster than you think.

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