OpenRAN 101 Series

OpenRAN Adoption in Different Regions: Why, What, How, When

OpenRAN 101 Series

OpenRAN: Why, What, How, When

History

Most of the CAPEX required to build a wireless network is related to the RAN segment, reaching as high as 80% of the total network cost. Any reduction in the RAN equipment cost will significantly help the bottom line of wireless operators as they struggle to cope with the challenges of ever-increasing mobile traffic, flat revenues and rising costs to maintain their networks.

Why

Two of the biggest challenges that networks face today is the cost to deploy and maintain networks due to vendor lock-in and network complexity as networks need to support 2G, 3G, 4G and eventually get ready for 5G. These challenges become especially apparent in low ARPU markets, rural areas, or developing markets like Latin America, APAC or Africa. That is why we see Open RAN adoption happening faster in those regions, as OpenRAN innovation gives those operators the ability to choose any RAN vendor thus reducing the deployment cost in those challenging deployment areas.

Open RAN first was deployed in rural areas. Why you might ask? Not only because it was an area where operators could test new and yet unproven technologies, but also from an investment and maintenance standpoint, rural areas are the most challenging ones. If a solution is low-cost enough for rural markets and can economically support the very limited number of users, it will have even better TCO in urban markets. If rural sites can be upgraded remotely with a software push to the edge, maintenance cost will be reduced as well and will make any urban deployments easy to upgrade as well.

The main takeaway: after many years of proving 2G 3G 4G Open RAN in rural areas, leading Open RAN innovators like Vodafone are ready to take Open RAN to urban locations.

What

It is important to emphasize here that 2G & 3G networks are not going away anytime soon. Some countries are switching off 2G, some are switching off 3G, but the majority of the world will still have a combination of 2G, 3G, 4G, and 5G networks for years to come. The GSMA mobile economy report 2020 mentioned that 5% of the global population will still use 2G in 2025. That still amounts to over 360 million users. 4G will be still dominating technology in 2025 as well.

In emerging economies, specifically across Africa, parts of Europe and Latin America, many operators still utilize substantial 2G and 3G investments. The migration from legacy to 4G and 5G networks will be a key challenge in those regions since the telecom industries there are still emerging, and an implementation of 4G and 5G could prove very costly because it will require running old legacy non-IP networks and new all IP (4G and 5G) at the same time. In many of the regions across Africa and Latin America, the replacement rate of cellular devices is much lower than in other regions of the world. As mobile phones that are compliant with legacy 2G and 3G tend to be used more in emerging regions, the operators require a solution that can support both 2G and 3G solutions while simultaneously preparing for the deployment of faster 4G and 5G networks. Open RAN solutions that support 2G, 3G, 4G and 5G will cost-effectively enable connectivity in those markets by simplifying installation and providing technological flexibility and sustainability.

In developed economies, US mobile operators were looking at Open RAN for rural at first, but current geopolitics around Chinese vendors have created a much bigger opportunity for Open RAN. The Open RAN Policy coalition, formed just a few months ago with many operators as its members, looks to educate the US government on Open RAN as a viable alternative to Chinese vendors. Dish is planning on building their network by 2023, based on Open RAN. And there are smaller US operators like Inland Cellular that are already expanding their 4G networks with Open RAN, proving that it is a strong contender for any RAN replacements.

The main takeaway: Open RAN that supports 2G, 3G, 4G and 5G is an attractive option for global MNOs.

How

In the past, the deployment focus for MNOs was placed on addressing urban issues to increase capacity or spectrum efficiency for densification. Uncertainty in the rural business case on the demand side, and operational complexity on the cost side, and competitive pressure in urban markets resulted in MNOs deprioritizing investment in rural in favor of urban. The rural challenge is now being solved across the globe with Open RAN delivering a new business approach. As Open RAN has proven itself in the most challenging rural locations, now it is getting ready for prime time in urban markets.

The main takeaway: As Open RAN proven itself in the most challenging rural locations, now it is getting ready for prime time in urban markets.

When

While mobile operators’ interest in open RAN technologies has been growing for a couple of years, Vodafone has been on the journey for over 5 years. Vodafone was the first operator to move the technology out of a lab environment and into a field trial in their emerging markets and rural areas (Turkey and DRC). Vodafone didn’t hold back on its intentions to use Open RAN to help expand its supplier base. Recently, Yago Tenorio, Vodafone's head of network strategy, confirmed that "we have had trials taking commercial traffic for about a year now," and "It is a 2G, 3G and 4G trial and it is live and the KPIs (key performance indicators) are really good and in some cases better than the incumbent."

Now, Vodafone has set an even more aggressive timeline to use Open RAN for urban.

Africa: The African continent poses a unique commercial and moral challenge for telecom service providers. A large number of the African population is still out of the telecom network – it remains one of the most under-penetrated regions in the world, with the primary 2G network yet to reach over 110 million people (as per the GSMA report). In addition, the Average Revenue Per Unit (ARPU) continues to be extremely low, and the telecom service providers have a tough challenge listing out their priorities. And this is where Open RAN can help and is set to play a vital role in the connectivity race as the regions that are connected are largely dependent on legacy infrastructure, with 2G and 3G, and 4G still in its infancy.

Latin America is a large geographical region with many areas that are extremely difficult to be reached. During spectrum actions, the government puts expectations on MNOs to cover the majority of geographical areas, not just by population. It presents a challenge to regional MNOs to cover entire countries as the cost of installation and maintenance of traditional RANs is high. Couple it with the need to support a variety of technologies to support 2G 3G 4G and 5G in the future, and no wonder Open RAN is catching on like fire throughout the region.

APAC, we see Open RAN gaining momentum for greenfield deployment with Rakuten. Smartfren, Ooredo among others plan on using Open RAN under TIP umbrella for brownfield as well. These operators are using deployment learnings from TIP, Vodafone and plan to use Open RAN in variety of scenarios.

In the US, regional provider Inland Cellular has been in the news lately for pioneering the use of Open RAN technology that might give the United States an advantage in its battle against Huawei.

The main takeaway: More and more operators see Open RAN as the only alternative to get them into the driver’s seat to deploy and manage their networks.