The development and deployment of open radio access networks (Open RAN) continues to progress across the globe, with initial implementations already visible in developed markets. Major operators in the US, Europe and other regions are collaborating on proofs of concept, large-scale testing and pilot projects. Further, the widespread expansion of 5G networks and advancements in 6G technologies are moving the needle forward for the Open RAN ecosystem.
A regional analysis of the current state of Open RAN adoption, its relevance in the 5G and 6G era, and the future outlook…
Global uptake
North America
North America dominated the global Open RAN market in 2022 and accounted for more than 44 per cent of the overall revenue. The market growth can be attributed to several factors, including the concentration of key operators such as AT&T, Inc. in the region. The area is witnessing significant investment in telecom infrastructure, which is opening up considerable growth opportunities for Open RAN adoption.
In North America, the US has been at the forefront in terms of adoption, owing to the government’s push for diverse and secure 5G networks. The National Telecommunications and Information Administration recently launched the Public Wireless Supply Chain Innovation Fund, worth $1.5 billion, for the development of open and interoperable networks. The investment aims to expand and improve testing to demonstrate the viability of Open RAN and remove barriers to adoption. It is also a means to address national security concerns related to the use of equipment from certain foreign vendors. Moreover, leading US-based operators such as AT&T, Verizon and T-Mobile are initiating Open RAN deployments. Meanwhile, in Canada, the government has expressed interest in Open RAN to diversify its 5G supply chain and reduce reliance on a few specific suppliers.
Europe
Europe has been witnessing a growing interest in Open RAN, with several countries and operators actively exploring its potential. The European Union has been promoting Open RAN as part of its 5G Action Plan. The region is already seeing trial announcements and new pilots, although larger-scale deployments are expected from 2025. In an important milestone, Deutsche Telekom AG, Orange S.A., Telefónica S.A., and Vodafone Group Plc signed a memorandum of understanding (MoU) to support the Open RAN roll-out as their technology of choice for future mobile networks to the benefit of consumers and enterprise customers across Europe. The four operators expressed their individual commitment to the implementation and deployment of Open RAN solutions to ensure that the technology quickly reaches competitive parity with traditional RAN solutions. Notably, the five biggest telcos in the region – Deutsche Telekom, Orange, Vodafone, BT and Telefónica – all have contracts for legacy equipment expiring in 2025 or 2026. This will provide an opportunity for a significant switch to Open RAN.
In the UK, the government has announced an investment of GBP 250 million in Open RAN technology to diversify its 5G supply chain and reduce dependency on high-risk vendors. In April 2022, the UK government released the Open RAN principles that are foundational to its approach for the development of open and interoperable RAN solutions, while providing clarity on the characteristics that Open RAN should possess in order to fulfil its potential. Recently, in September 2023, the government signed an MoU with four telecom operators to develop RAN architectures based on the aforementioned Open RAN principles. This included reaffirming the country’s shared ambition for 35 per cent of network traffic, in aggregate, being on open and interoperable systems by 2030. Overall, according to the Dell’Oro Group, the European Open RAN market is expected to surpass $1 billion by 2027.
APAC
According to the GSMA Mobile Economy APAC 2023 report, the Asia Pacific (APAC) region is experiencing exponential 5G growth, with next-generation connections predicted to account for 41 per cent of all mobile connections by 2030. This is expected to drive the Open RAN market. Dell’Oro Group predicts that APAC will lead the global Open RAN market, with a near 35 per cent share in 2030. Market revenue in the region will reach $11.5 billion by 2030, growing at a compound annual growth rate of 34 per cent.
Countries such as Japan, South Korea and India are spearheading regional growth due to their technological prowess, skilled manpower and growing emphasis on developing a robust digital ecosystem. These factors are contributing to the growth of the regional market. Among them, Japan has been at the forefront of Open RAN adoption, with its government actively promoting the technology as part of its national 5G strategy. Japan-based telecom operators such as Rakuten Mobile and NTT Docomo are leading in Open RAN deployments. Rakuten Mobile became the first operator in the world to launch a fully virtualised, cloud-native mobile network based on Open RAN architecture. Meanwhile, South Korea recently launched the Open RAN Industry Alliance (ORIA), a national body that aims to develop a domestic Open RAN ecosystem in the country. According to South Korea’s Ministry of Science and ICT, ORIA will collaborate with international Open RAN industry bodies such as the O-RAN Alliance, bringing together domestic mobile carriers, local and international vendors, research firms and academia to collaborate and develop a public-private ecosystem in the country.
Latin America
Open RAN is still at a nascent stage in Latin America, with very few deployments and announcements. However, there is a growing interest among operators and governments in the technology. Brazil, the largest telecom market in the region, has been exploring Open RAN in its 5G network roll-out. The Government of Brazil and state-run research and industrial innovation company Embrapii have announced an investment of BRL 180 million ($36 million) to form centres for research on 5G, 6G and Open RAN. Brazil’s National Telecommunications Agency recently signed an agreement with the Japanese government with the goal of increasing Open RAN deployments in Brazil and developing new business opportunities between the countries.
Role in 5G
Open RAN is seen as a promising approach to building mobile networks that can accelerate 5G adoption. Open network architectures offer more diversity by allowing the entry of multiple equipment vendors into the ecosystem, thus giving telcos the flexibility to avoid vendor lock-in while also stimulating competition. The technology offers the benefits of virtualisation, automation and interoperability. As per industry estimates, Open RAN frameworks can also reduce an operator’s total cost of ownership by a significant 30 per cent. As 5G network adoption continues worldwide, operators are increasingly choosing Open RAN approaches to enable network roll-outs and upgrades at significantly lower costs. Open RAN has also found a business case in the private 5G segment due to the host of operational and financial benefits it brings for enterprise networks.
Although 5G will continue to see a mixed mode of architectures, 6G will inherently be Open RAN-based from day one.
Setting the stage for 6G
Open RAN architecture provides the foundation for a seamless evolution to the next generation, delivering greater flexibility for operators. Open RAN provides operators with multi-vendor, multi-domain standardised interfaces and processes, and allows them to choose from the “best of breed” — not just at initial deployment, but throughout the network lifecycle.
A key development on this front is the formation of the next Generation Research Group (nGRG) by the O-RAN Alliance in June 2022. Founded by members affiliated with major mobile operators, telecom vendors, the IT industry, and well-known research institutes and universities, nGRG is a research task force meant to leverage industry and academic 6G research efforts, and determine how Open RAN will evolve to support 6G and beyond, considering regional research efforts, the ITU Radiocommunication Sector and 3rd Generation Partnership Project development.
Future outlook
The technology gap between traditional RAN and Open RAN is evidently closing as Open RAN solutions are moving from trials to pilot implementations. Given the initiatives and the strength of its overall business case, widespread adoption of the technology is inevitable. The timing, though, will vary by country, depending on the operator and vendor ecosystem, and government support. Integration and security challenges will need to be addressed to further drive Open RAN adoption. That said, migration to Open RAN will not occur as a single, decisive step for many operators, but through a series of iterations towards developing a diverse, multi-vendor stack.
Open RAN deployments in public 5G networks are expected to accelerate after 2025. According to industry projections, there will be 1.3 million Open RAN, cells worth $19.2 billion, deployed by 2030. Although 5G will continue to see a mixed mode of architectures, 6G will inherently be Open RAN-based from day one.
