According to research and analysis by Dell’Oro Group, open radio access network (O-RAN) investments surged during the first quarter of 2021. Preliminary estimates suggest that revenue from O-RAN and O-RAN-compatible macro and small cells radios, together with baseband hardware and software, increased nearly five-fold, year-over-year. However, the uptake is uneven.
Four key first-quarter O-RAN-related takeaways include:
Operators in the APAC region are largely behind the surge, underpinned by a fairly synchronized migration from proprietary RAN toward O-RAN in Japan. In addition to Rakuten, which now has some 50,000 radios up and running, other Japanese operators are increasingly optimistic about O-RAN and the role open interfaces will play with more advanced radio deployments.
Not surprisingly, macro deployments are dominating the O-RAN revenue mix both globally and in APAC, reflecting the state of the overall RAN market and the current focus by operators deploying O-RAN. This view is consistent Dell’Oro Group’s projections and the recently released Open RAN Technical Priorities Summary from the larger European telcos, suggesting macro-RAN is the primary target for the operators.
At the same time, O-RAN small cell activity is on the rise. Helping accelerate it is faster growth with millimeter-wave (mmWave) deployments in Japan, with multiple operators embracing the benefits of combining the higher spectrum with the sub-6 GHz bands.
The traditional top-five RAN vendors (Huawei, Ericsson, Nokia, ZTE and Samsung) dominate the more than $10 billion massive MIMO RAN market; however, O-RAN proponents remain optimistic that a recent uptick in O-RAN related announcements eventually will lead to an improved supplier landscape. Predicated on the assumption that the shift toward wider bandwidths will be a catalyst for 5G standalone architecture, the asynchronous availability of the upper mid-band spectrum offers a window of opportunity for new entrants.
Even if the massive MIMO market is relatively mature and highly concentrated, it is not too late for suppliers with weaker RAN shares to use O-RAN combined with standalone architecture to enter this segment. Moreover, the number of suppliers that want to seize this opportunity to bolster growth is increasing with multiple smaller non-top-five RAN suppliers – including Airspan, Fujitsu, Mavenir and NEC – announcing the availability or upcoming go-ahead of O-RAN Massive MIMO antenna systems. With the silicon providers also ramping up investments to accelerate the shift toward advanced O-RAN radios, Dell’Oro Group expects this non-top-five supplier O-RAN massive MIMO list to evolve.
Because more operators are suggesting performance parity with traditional systems is expected, new massive MIMO entrants understand what they need to deliver for in-building wireless with weight, size, transmitter-receiver configurations, power consumption and spectral efficiency. The bar is high, and it will continue to rise. No one is under the impression that achieving performance parity will be a trivial task. At the same time, the O-RAN community has received the message loud and clear: Broader O-RAN adoption to some degree hinges on the success of massive MIMO.
With O-RAN’s strong showing in the first quarter, Dell’Oro Group is adjusting the short-term outlook upward and now projects total O-RAN revenues to nearly double in 2021. Although we are not revising the long-term massive MIMO O-RAN projections, we will continue to monitor the situation closely to better understand how the growing O-RAN ecosystem will affect overall vendor dynamics.
Resource: Open RAN page
Stefan Pongratz is vice president of Dell’Oro Group. As an industry analyst, his specialties include 5G RAN, CBRS, mobile RAN, open RAN, private wireless and telecom capex.