Cloud-native and virtualised 4G/5G networks based on open radio access networks (O-RAN) are gaining traction among operators across the globe. Together, the strength of these two technologies enables mobile operators to compete more effectively in the cloud era. These networks based on the O-RAN architecture are programmable, agile and flexible, and can facilitate innovative use cases. Owing to these benefits, O-RAN deployments are gaining momentum, helping stakeholders leverage new opportunities in this domain.
Key characteristics of cloud-native O-RAN
Cloudification is a core component of O-RAN networks. O-RAN networks comprise the following key components:
- Cloudification, which involves hardware and software disaggregation. It uses RAN applications as cloud-native functions.
- Intelligence and automation, which use open management and orchestration with external artificial intelligence (AI)/ machine learning (ML) capabilities.
- Open internal RAN interfaces, which include interfaces defined by 3GPP.
Legacy RAN has been designed using closed and proprietary architectures that lock operators to a particular vendor, for both radio and supporting hardware (baseband units). Now, with O-RAN, operators can decouple not only vendors, but also software from hardware, facilitating the migration to a cloud-native model. The key functionality is provided by containerised network functions – software that runs on virtually any consumer off-the-shelf server.
This is important because the resulting cloud-native model enables workflow orchestration and network automation that can deploy, scale and heal without intervention. Further, it is extremely beneficial for remote locations that have historically required expensive truck rolls.
Building cloud-native infrastructure
A secure, modern cloud-native implementation of O-RAN would rely on securing the underlying microservices-based architecture. In this regard, O-RAN networks have O-cloud embedded in their architecture. This is a cloud computing platform made up of physical infrastructure nodes using O-RAN architecture. It also creates and hosts the various virtual network functions used by RAN intelligent controllers and other infrastructure elements.
Further, cloud RAN is a virtualised RAN designed to be cloud-native. It is built in a future-proof architecture and incorporates key elements such as microservices and containerisation.
Network transformation strategies
The deployment of O-RAN technology leads to significant transformation across the telecom network. It not only makes the network more software-driven, but also makes it interoperable among multivendor equipment suppliers, across different generations of networks.
It also ensures that more efficient equipment from different vendors enters the fray and helps telecom companies reduce their costs. O-RAN allows standardisation of the network infrastructure, making it cheaper and easier for telecom companies to implement network changes. Apart from interoperability and disaggregation of hardware and software, O-RAN promotes self-healing, self-configuration and openness, which help service providers future-proof their investments. It makes deployments cloud-native, easy and affordable to maintain and upgrade to any future technology, resulting in a potential cost reduction by up to 30 per cent.
With this approach, telcos no longer need to add a new layer for a new technology. By enabling a software upgrade, which does not require a site visit, telcos can upgrade the network whenever their subscribers are ready to adopt new technologies. It also makes it extremely easy for service providers to introduce new products and services to their subscribers.
Industry adoption trends
Currently, 5G open RAN interfaces and architectures are easier to deploy for greenfield service providers and extremely difficult to deploy for brownfield operators that have already widely deployed 4G. A key challenge that brownfield operators face is the lack of interoperability available when using legacy RAN interfaces with an O-RAN solution.
Despite this challenge, a number of mobile network operators throughout the world, including many brownfield networks, are now trialling and deploying O-RAN technology. This trend is expected to grow further with a large number of brownfield deployments occurring in the coming years.
In terms of global regions, Asia Pacific is expected to dominate the O-RAN market with a nearly 35 per cent share in 2030. As per industry reports, the O-RAN market in the Asia-Pacific region is expected to reach $11.5 billion by 2030, growing at a compound annual growth rate of 34 per cent between 2022 and 2030. While Japan is going to drive the Asia-Pacific market initially, China will emerge as a leader in this region by 2030. Meanwhile, North America and Europe are expected to witness a growth rate of more than 45 per cent in the market. However, their share in 2030 will be around 31 per cent and 26 per cent respectively.
O-RAN also emerged as a key topic of discussion at the recently held Mobile World Congress. The event witnessed 46 demonstrations of O-RAN technology. Further, there were a number of notable announcements from major legacy operators in Europe to scale up O-RAN deployments. For instance, UK-based Vodafone announced that 30 per cent of all its European sites will be using O-RAN by 2030 and Spain-based Telefonica announced that O-RAN will constitute 50 per cent of all new base stations by 2025. Meanwhile, Japan-based NTT DoCoMo announced that it has around 10,000 O-RAN base station sites and is the first operator to launch a commercial O-RAN 5G service.
Opportunities and outlook
The biggest operators in the world are keen to jump on the O-RAN bandwagon and are undertaking efforts to scale up the adoption of the technology. Further, significant progress is being made to overcome the key challenges of interoperability testing and integration.
In many cases, O-RAN deployments will also depend upon the pace of 2G/3G switch-off and the need to avoid disruption to customers as legacy platforms are phased out. Hence, the targets set by operators may well be missed. In addition, some industry experts are doubtful that the cost of O-RAN multivendor networks will be lower than that of single-vendor networks, as the need for integration and interoperability testing represents significant additional costs.
However, the mainstream adoption of disaggregated networks will only happen when the operational benefits and flexibility offered by O-RAN outweigh the hardware, power and system integration costs and compensate for them, while attaining the same high level of network performance.
Another major trend expected over the next few years is the shift in the adoption of open RAN from greenfield operators to more brownfield operators that want to upgrade or evolve their existing networks. This is when the O-RAN market will witness a larger increase in scale and market share in the 5G era.
As operators look to move to the next generation of technology, the hope is that O-RAN is going to become the de facto standard. However, this open network expansion will depend on the continued growth of a healthy ecosystem that would require adding new suppliers and innovations to this developing market.
Net, net, if stakeholders across the telecom domain continue deploying open RAN networks and telecom equipment vendors continue developing cutting-edge technology solutions for the O-RAN-enabled 5G era, the world will soon witness radio access networks flourishing in an open environment.
As per industry experts, the number of O-RAN-based radio units deployed by operators and private networks will grow to more than 800,000 in 2025 from only 122,000 RUs in 2020. When this happens, telcos will apply the O-RAN business model to both rural as well as urban areas in many mainstream markets.
