O-RAN Market

Global O-RAN Market: Market Outlook

Open RAN” is the movement in wireless telecommunications to disaggregate hardware and software and to create open interfaces between them. O-RAN opens the interface between the BBU and RRU / RRH which enables any vendor’s software to work on any open RRU / RRH. open interfaces enable the use of one supplier's radios with another's processors – which is not possible with CRAN or vRAN.

Open RAN makes the RAN open within all aspects and components, with the interfaces and operating software separating the RAN control plane from the user plane

What are the Key Trends Impacting Growth of the O-RAN Market?

Increasing demand for flexible network coverage among customers is prompting companies to invest in network infrastructure to provide reliable network coverage and data transformation services

Companies are looking for a solution that would increase the return on investment by investing in network infrastructure for network coverage. O-RAN is a cost-effective solution for network service providers to manage data traffic with efficient operational and capital expenditure.

O-RAN helps reduce CAPEX and OPEX of service providers and also helps enhance the quality of packet data transfer.

Service providers are adopting macro cell architecture or small cell architecture to provide network coverage to small businesses, shopping malls, public places, and offices, with low investment and maintenance cost in network infrastructure. Minimization of CAPEX and OPEX in network infrastructure for indoor and outdoor networks is expected to boost the demand for virtualized radio access networks.

The Growth in Radio Access Network Technology

In 1950’s the first terrestrial microwave telecommunication system was installed to support 2400 telephone circuits. The Improved Mobile Telephone System (IMTS) was developed with simultaneous transmit and receive.

In 1962, the first communication satellite, Telstar, launched into orbit, and in 1970, Packet switching emerged as an efficient means of data communication, with the X.25 Standard emerging late in the decade. In 1992, the one-millionth host connected to the Internet, with the size now approximately doubling every year.

In 1994, FCC licensed the Personal Communication Services (PCS) spectrum (1.7 to 2.3 GHz) for US$7.7 Bn. In late 1990’s, Virtual Private Networks (VPNs) based on the Layer 2 Tunneling Protocol (L2TP) and IPSEC security techniques became available.

The 21st century communications landscape has been characterized by virtualization and digital transformation, as well as a preference for open source technologies rather than proprietary, monolithic solutions. The need for flexible and more cost effective solutions to manage the 5G base station has driven the demand for O-RAN in 2020.

How is Rising Investment in 5G is Pushing the Growth of O-RAN Market?

In this technological era, wireless networking is gaining major importance across all industries in order to fulfill the challenges of the future.

Faster networking data rates, lower latencies, and higher bandwidth are major requirements across industries in order to expand business operations. Private LTE and 5G networking are supporting these requirements. To establish a strong network capability, the demand for O-RAN is increasing across the globe.

The investment on 5G infrastructure is expected to have a positive impact by increasing R&D activities and product innovation. Following are the companies that are building the value chain of 5G networking and can help in pioneering the 5G market:

• OEMs for edge computing and data centers: Huawei Technologies, Dell EMC, Cisco Systems, Hewlett Packard Enterprise, IBM, Lenovo, Pure Storage
• Suppliers of edge compute components and datacenters: Broadcom, NVIDIA, Qualcomm, Advanced Micro Devices, Intel, Samsung Electronics, Xilinx
• Providers of network transformation: Nokia, Ericsson, Huawei Technologies, Intel, National Instruments, Samsung Electronics, ZTE
• Suppliers of IP and modems: Ericsson, Nokia, Intel, Huawei, Qualcomm, Samsung Electronics

What are the Key Challenges that may Restrain Growth of the O-RAN Market?

Increasing poor backhaul connectivity of mobile networks is expected to restraint the vRAN market. Backhaul connectivity is often utilized in telecommunication services and is used for transmitting a signal from a remote location or network to another site, usually for a central one.

In small cell networks, connectivity of mobile networks is poor, which has a negative impact on the performance of data transmission. Increasing demand for data management is seen with the use of small cells for network connectivity. Increasing data traffic through small cells is a key reason for poor data management and it also creates data security issues.

Poor backhaul connectivity and data management process is thus expected to restrain the market during the forecast period

Key Segments of O-RAN Market Covered in the Report

Based on component, the O-RAN market has been segmented as

• Hardware
• Software
• Services

Based on technology, the O-RAN market has been segmented as

• 3G
• 4G
• 5G

Based on the region, the O-RAN market has been segmented as

• North America
• Latin America
• Europe
• South Asia
• East Asia
• Oceania
• Middle East & Africa

Competitive Landscape

Key players such as Fujitsu Ltd., NEC Corporation, Rakuten, Inc., Samsung Electronics Co., Ltd, Qualcomm Technologies, Inc., AT&T, Inc., Cisco Systems, Inc., NewEdge Signal Solutions, Verizon, VMware, Inc., ASOCS, Deutsche Telecom  AG, Nokia Corporation, Huawei Technologies Co., Ltd. and others are actively involved in offering O-RAN for different applications. 

What strategies are the Key Players adopting for Increasing their Market Share in the O-RAN Market?

The manufacturers involved in the production of O-RANs are carrying out different expansion strategies for increasing their market share in the global proteins market. Key players are focused towards acquisition and collaboration for providing better experience to their customers.

• In October 2020, NEC Europe Ltd. a wholly owned subsidiary of NEC Corporation collaborated with Altiostar and VodafoneZiggo, and announced an open virtual Radio Access Network (Open RAN) integrated solution in the Netherlands to bring about technological advances in the country. The main strategy of this collaboration or partnership is to develop an openRAN system, which can bring transformative changes in the telecommunication industry, so that customers can experience mobile network solutions.
• In Apirl 2020, Rakuten Mobile launched urban area 4G commercial services by using openRAN technology in Japan in order to build its 5G network with O-RAN specification. Additionally, the company unleashed its 5G services in Japan with no additional cost to its users. The main strategy of the company is to build out its network in order to attain countrywide coverage across all of Japan.

What are the Key Opportunities for O-RAN Vendors?

• Telecom carrier companies such as Orange S.A. and AT&T, Inc., have started offering M2M platforms to integrate mobile devices with M2M-connected devices. M2M devices include wearable watches equipped with sensors, smart homes, and home security systems. These devices are able to connect with smartphones and share information. Smartphones utilize this collected data and convert it into meaningful information for the end-user. Deployment of 4G LTE in several countries is increasing the adoption of M2M technology in the automotive sector. 4G LTE helps in better connectivity of M2M devices with mobile applications. Telecom carriers are also offering testing platforms to test developer M2M applications and storage of end-user data for application purposes. The M2M-based telecom API market is expected to expand in the near future, as M2M devices are increasingly using mobile devices.
• Increasing adoption of IoT devices in residential and commercial sectors require strong network connectivity for transmission of data from one location to another, and small cells are a cost-effective and reliable option for service providers to improve service quality

Why is the U.S. a Big Market for O-RAN?

• openRAN is gaining momentum in the U.S. for improving the network performance for every user in radio's range. Additionally, the US. Federal commission or government are collaborating with the prominent players such as Vodafone Group PLC. , and Telefonica, S.A and among others, in order to expand open RAN critical architecture.
• Fiber Broadband Association promotes fiber deployment to homes and business at it is expected that fiber deployment will drive the 5G market in North America which will indirectly push the demand for vRAN deployment which enables more flexible option with cost efficiency to the service provider. US market is driven in large part by carriers’ 5G wireless deployment plans, which will require fiber backhaul.
• In largely dense population area such as New York city, it is estimated that approximate 450-500 small needs to be deployed per square mile. Where as it is estimated that within the same area 40-50 macro cell will be deployed for a better and more agile network services. The deployment of small cell or macro cell is largely depends on the network operator, cost of deployment and the population of the area. Small cell is estimated to dominate the North America O-RAN market. With the increasing penetration of 5G, small cell and macro cell deployment will be increased exponentially.

Overview of Major Countries Actively Pushing OpenRAN as their Government Policies

United Kingdom: The U.K. government aim is to strengthen O-RAN technology by collaborating with Vodafone U.K, so as to deploy 2,600 O-RAN sites in Wales and England, till 2022 time frame.

Germany: Germany is leading the charge in advancing Industry 4.0 transformation in Europe. The O-RAN vendors such as Telefonica, S.A., NEC Corporation among others are taking initiative in providing 5G O-RAN solution across Germany, based on the specifications of the O-RAN Alliance.

China: OpenRAN technology is growing fast in China. Till 17 December 2020, approximately 44 Chinese companies joined to O-RAN Alliance, so as to expand OpenRAN/vRAN architecture across China. The main aim is also to have a control on  technical specifications and supply chain of OpenRAN 5G products and services across China.

India: In India OpenRAN/vRAN solutions is going to be next big wave of virtualization. For instance, in April 2020 Vodafone Idea Limited (VIL), India’s leading telecom operator, has expanded Open RAN based deployments in India with OpenRAN solution providers.  So, Vodafone Idea Limited (VIL), has been engaged to develop openRAN robust solution providing RAN functionality, so as to deal with the network congestion and traffic requirements of Indian networks.

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