Open RAN—where are we vs. where we’re going

Buy-in from incumbent vendors could catalyze Open RAN deployment

With Dell’Oro Group estimating that Open RAN manufacturer revenues accounted for a mid-single digit share ($2 billion to $3 billion) of the total $40 billion annual RAN market in 2022, analyst Stefan Pongratz expects disaggregated radio systems to steadily grow through the end of the decade. Based on projections shared during the Open RAN Global Forum, available on demand, Pongratz sees the segment growing to around 10% of total by 2025 and around 15% by 2030. 

To set the stage, Pongratz detailed the six core pillars of O-RAN: open interfaces, multi-vendor, intelligence, interoperability, vRAN/cloud RAN, and automation. “Most everybody is on the same wavelength, so to speak, in terms of the main pillars,” he said. For Dell’Oro’s part, a deployment needs to only tick the box associated with open interfaces to be counted.

He acknowledged that intelligence and automation are also part of the vRAN/cloud RAN story which isn’t necessarily the same as O-RAN. “That train has left the station,” he said, “and that train will probably continue to run even if multi-vendor Open RAN…doesn’t take off at the same rate as expected.” 

The key point Pongratz called out was that in 2022 Open RAN revenues accelerated faster than expected but, he cautioned, revenue flowing to suppliers isn’t sufficient to support anywhere near the same level of R&D spend from integrated radio vendors. 

How does disaggregated RAN mesh with the 6G vision? 

Looking through the end of the decade, Pongratz expected more scaled adoption of Open RAN in the 2025 timeframe, especially as major European operators chip away at long-term deployment commitments. At the midpoint of the decade, he said, “In general, we believe we will be in a better position from a cost, timing, performance parity [perspective], and more importantly from buy-in by established players.” 

The last point on buy-in, he said, could serve as a significant catalyst for the overall market. In fact, in September Ericsson announced it will “lead the industrialization of O-RAN by putting support for open fronthaul in its Cloud RAN portfolio beginning in 2024. That said, “There’s of course not going to be a magic silver bullet,” Pongratz said. 

Looking ahead to 6G, he sketched out an initial vision, including further enhancements to mobile broadband, machine-type communications and ultra reliable low latency communications alongside spatial perception, sensing and artificial intelligence services. “Many aspects of Open RAN vision will make sense.”