Open Radio Access Network or Open RAN technology, which leverages cloud and software-based solutions to enable the delivery of 5G services, is still viewed with some caution by mobile operators, according to Kagan’s 2022 global survey of 82 mobile network decision-makers.
In fact, the number of respondents claiming they will only use Open RAN to build their 5G networks has dropped by 5 percentage points year over year, from 39% in 2021 to 34% in 2022.
The number of respondents planning to deploy Open RAN technology to complement existing 5G rollout systems — rather than solely using them — increased slightly year-over-year from 41% to 43%. Meanwhile, operators planning Open RAN for rural or green 5G networks and service deployments remained roughly the same at 20%.
A small but notable change was also registered in the number of MNOs who indicated that they had no plans to use Open RAN technology in the 5G builds, at 2.4% (vs. zero percent in 2021 ).
Open RAN defined
An extension of software-defined networking or SDN and virtualization technology, Open RAN technology offers operators a more flexible path to deploy 5G services by allowing mobile network operators not to be “locked in” or overly dependent on traditional RAN hardware providers and systems. Open RAN systems are based on off-the-shelf or COTS hardware and use open interface standards.
Another notable shift in MNO plans for 5G network deployment was revealed by the following question: when will your company adopt open RAN technology?
While the number of respondents who said they had already deployed Open RAN — or planned to adopt the technology in 2022 — rose to 33% in the most recent survey from 26.5% in 2021, the remaining two-thirds said they did of respondents indicated that Open RAN technology would be delayed by a year or two compared to the 2021 responses. For example, in the 2021 survey, 46% of respondents said they would deploy Open RAN in 2022, 22% in 2023, and the remaining 6% in 2024. The latest.
The 2022 survey data shows that MNO plans for open RAN-enabled 5G networks and services will be outsourced for a year or more, with 38% using open RAN in 2023 (vs. 22%) and 22% in 2024 (compared to 6%). and 8% in 2025 (vs. zero percent year-on-year).
In terms of sheer number of operators, 68 of the 79 operators that indicated they will use open RAN technology also indicated that they plan to do so in 2023 or later.
Therefore, MNOs seem to have decided to take a less aggressive, more cautious approach with open RAN technology. So why the decline in operator enthusiasm for open RAN?
Virtualization: Not so fast?
The answer could simply be that operators of all stripes have decided to slow the pace of their investments in virtualization technology. While shifting the “universe of functionalities” from traditional hardware-based systems to software and cloud-based solutions can bring operators a number of initial capital savings and operational efficiencies, these savings and efficiencies may be less apparent as networks and subscriber bases are scaled to mass-market implementations. Add in the cost of software licenses and upgrades, and the proclaimed cost savings enabled by virtualized, software-based solutions evaporate over time compared to hardware-based solutions.
To that end, the percentage of respondents who plan to use certain functionalities enabled by RAN virtualization has decreased year over year. For example, 68% of respondents to the 2022 survey said they plan to use RAN virtualization to implement cloud-native network capabilities, compared to 75% in 2021.
There was also a corresponding decrease in the percentage of respondents reporting plans to implement virtualized network functions year over year, with 46% saying they would use virtualized RAN technology to do so, a further 7 percentage point decrease from the 2021 survey, where 53% planned to do so.
Supplier short lists
Respondents were also asked to provide insight into their potential choices for open RAN solution providers. Once again, Ericsson and Nokia were the top two providers, both shortlisted by around 50% of respondents, followed by Altiostar/Cisco and Accelleran. However, for 2022, Samsung received 25% of the vote. This is not surprising as Samsung has been gaining traction around the world with its virtualized RAN or vRAN solution set, evidenced by its recently announced partnership with semiconductor supplier Marvell Technology Inc. and pan-European MNO Vodafone Group PLC.
Vodafone launched the first open RAN sites in the UK back in January 2022, leveraging Samsung’s vRAN solution set. In addition, Vodafone recently announced the launch of a commercial open RAN pilot in Germany, Vodafone’s largest single market in Europe. The Open RAN pilot project in Germany uses both radios and vRAN solutions from Samsung.
The data presented in this article is from Kagan’s September 2022 global business-to-business 5G survey. A total of 82 carrier decision-makers knowledgeable about 5G deployment plans were surveyed online or by phone. Of the respondents, 10 operators were from North America, 28 from Europe, 11 from the Middle East/Africa, 14 from Latin America and 19 from Asia Pacific.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, a separately managed division of S&P Global.