Telecom operators are looking at rolling out their 5G networks through a hybrid model, with equipment sourced from both vendors like Nokia, Ericsson and Samsung as well as players in the emerging area called open RAN. Mavenir, Cisco, TCS, Intel etc operate in the open RAN segment, which is a system integrator model. Operators feel that the use of open or virtualised radio networks (RAN) reduces costs and enhances productivity.
According to some estimates, 5G deployments that leveraged open RAN saw capex savings of as high as 49%, while some studies project average savings for cloud network deployments to be 37% over a five year period. Additionally, O-RAN will allow service providers to offer a plethora of new cloud-delivered services to enterprises and end-consumers, reduce their time-to-market, and create new revenue streams.
Bharti Airtel, which is also doing a 5G trial with open RAN provider Mavenir in Punjab circle, has found the results very encouraging. Reliance Jio and Vodafone Idea too have done several tests and trials around open RAN in the past with good results.
Usually, radio access network (RAN), which includes base station and antennas, makes up for the majority of the network cost. Since open RAN enables telecom service providers to diversify supply chains, and bring in unprecedented levels of interoperability and agility, capex can be brought down drastically.
But as the open RAN technology is yet to be tested fully, it will take a couple of years for the operators to deploy it at macro level or pan-India basis. As per officials in various telecom firms, at the initial rollout of 5G networks, traditional vendors will be utilised but over the next 2-3 years, the share of open RAN will increase by as much as 50%. “5G is going to be software driven and open RAN gives much more flexibility to an operator to plan its network. Gone are the days of proprietary end-to-end network of any vendor,” said an executive with one of the telecom firms.
The government too supports open networks as it gives an opportunity to local firms to make some components of telecom network. Earlier, because of proprietary networks, it was difficult for Indian firms to enter into telecom equipment space but with open RAN, there will be opportunities for local firms to manufacture equipment.
Last year, Bharti Airtel had announced collaboration with TCS for implementing made in India 5G open RAN solution for its rollout. Airtel is a board member of O-RAN alliance and is committed to explore and implement open RAN based networks in India. Similarly, Reliance Jio is testing a home-made 5G solution as part of the 5G trials.
According to a recently published report by Dell’Oro Group, preliminary findings suggest that on a global basis total open RAN revenues remained on the upside both in 2020 and during 2021, bolstering the thesis that open RAN is here to stay and the architecture will play an important role before 6G. As per the report, open RAN revenues are expected to account for around 15% of the overall 2G-5G RAN market by 2026, reflecting healthy traction in multiple regions with both basic and advanced radios.
“The Asia Pacific region is dominating the open RAN market in this initial phase and is expected to play a leading role throughout the forecast period, accounting for more than 40% of total 2021-2026 revenues,” the report highlighted.
