The telecom industry, globally, is witnessing an increased uptake of open radio access network (O-RAN) in network deployments, given the plethora of benefits that the technology offers over legacy radio access networks. By disaggregating the software and hardware elements of networks, O-RAN is helping operators reduce their dependency on single vendors, thus bringing down network-related costs. Further, by increasing the number of network infrastructure partners, O-RAN is helping operators build better and more cost-effective 5G networks.
Although the technology is still at a nascent stage and is yet to achieve mass commercialisation, recent advances are expected to give a major boost to its adoption. Operators are now leveraging next-generation technologies such as artificial intelligence, machine learning, virtualisation and big data analytics to automate the software components of the O-RAN architecture. Besides enhancing operational efficiency, the use of these technologies is helping operators make their networks more intelligent and scalable.
Given the potential benefits of O-RAN, telecom operators globally have announced their plans to switch from traditional RAN to a more flexible network architecture. As of end September 2021, 73 operators from 38 telecom markets have either deployed or committed to O-RAN deployments, according to the industry body GSMA.
Why are telecom operators looking towards open network architectures?
Even in the past, attempts were made to make RANs as open and multivendor capable as possible. To this end, some permanent standards regarding making RAN accessible to multiple players were incorporated under the 3rd Generation Partnership Project. However, these measures were not implemented uniformly, with vendors expressing their unwillingness to open up their radio technology to competitors. Industry experts contend that the fully open framework has significantly greater momentum behind it this time around. This is because operators today face a much-reduced choice of vendors, following years of consolidation among suppliers of base stations and small cells. Moreover, there is increasing international support for O-RAN, given the key role the technology can play in developing local mobile networking industries.
Further, with small cells emerging as a promising alternative for expanding the infrastructure backbone in areas where it may not be geographically possible or economically feasible to add more towers and base stations, a large number of deployers with varying business models have entered this market in the last few years. These vendors are clamouring for a flexible ecosystem that can produce a range of solutions for different scenarios.
Key demand drivers of O-RAN
Telecom operators globally are warming up to the idea of O-RAN as they look to reduce their network deployment costs and prepare for the launch of 5G services. O-RAN gives operators the flexibility to use solutions from multiple vendors, resulting in increased competition among network equipment providers and a lower total cost of deployment. The total cost of ownership of a traditional RAN accounts for 65-70 per cent of a mobile network’s total cost. According to industry estimates, operators can save up to 40-50 per cent on capex and 30-40 per cent on opex by using O-RAN frameworks.
Further, O-RAN is enabling operators to deploy mix-and-match architecture and common reference designs, besides giving them the ability to access a wider base of innovation in all elements of the network, including its integration and services. Under traditional RAN, operators have to follow a hardware-driven approach of deploying an additional layer to the network every time a new technology emerges. This requires operators to invest a substantial amount every few years to upgrade their networks. By obviating the need to replace the entire network gear to introduce new solutions, O-RAN can help operators lower their time-to-market and hence facilitate innovations in the industry. These factors, experts believe, could be significant in accelerating network roll-outs, and enable deployers to adjust RAN architectures to different form factors and cost bases required in different environments more flexibly. Further, O-RAN makes it easier to deploy virtualised networks for the first time, since these networks are increasingly using open architectures for deployment.
O-RAN is also slowly becoming the technology of choice for operators for 5G network roll-outs. As 5G services will be used for a wide variety of use cases across multiple industries, the associated network topology and requirements such as throughput, latency and simultaneous connections will depend on each use case. To this end, O-RAN offers the advantage of combining components from a diversified supply chain to effectively accommodate the multiple use cases.
Further, by enabling operators to increase the number of their network infrastructure partners, O-RAN is expected to help build better and more cost-effective 5G networks. Moreover, using O-RAN, telecom operators can create fully virtualised infrastructure capable of delivering critical 5G-based services. O-RAN can thus help operators reduce deployment costs, improve interoperability between vendors and bring intelligent computing to the edge of the network, thereby improving performance and unlocking new 5G capabilities.
Since open interfaces enable the development of third-party artificial intelligence- and machine learning-driven solutions, O-RAN can also help telecom operators leverage information from the data traffic on their networks, which could then be used to improve network performance. This is likely to be particularly useful in the case of 5G and internet of things devices powered by 5G, where a huge volume of data will be generated, opening up the possibility to derive several useful insights.
O-RAN to dominate small cell deployments
The O-RAN market is receiving a huge impetus from the rising demand for cellular networks in enterprise environments. Enterprises are leveraging O-RAN to support high quality in-building connectivity and enable new processes and use cases on industrial campuses. This also means that the majority of the early O-RAN deployments will be led by small cells, owing to the fact that most enterprise networks are localised by nature and hence reliant on small cells for their network needs. Many of the small cell networks are being rolled out and operated by non-traditional providers such as private network operators, and enterprise integrators and neutral hosts. For these operators, O-RAN is the preferred mode of deployment, as it gives them the flexibility to quickly adopt new architectures and engage with new vendors. The Small Cell Forum estimates that by 2026, O-RAN will account for 80 per cent of the total new small cells deployed, compared to 45-50 per cent for macro networks. Lower barriers to change in relatively greenfield small cell environments and the rising intensity of demand for new networks are expected to drive this trend.
The increasing uptake of O-RAN by telecom operators is a major step towards ensuring the democratisation of radio networks. Essentially, O-RANs aim to lower costs, increase flexibility and spur innovation by enabling operators to choose their equipment from among multiple stakeholders. O-RAN is also at the epicentre of the launch of 5G networks, given its ability to support a plethora of 5G use cases. The addition of next-generation technologies such as artificial intelligence and virtualisation could further fuel the uptake of O-RAN by telecom service providers. By enabling the separation of control functions from the hardware fabric, O-RAN facilitates the introduction of standardised control interfaces, which can be embedded with solutions providing real-time network analytics. O-RAN, therefore, coupled with next-generation solutions, can help in developing autonomous and self-optimising networks that can be scaled up easily depending on operators’ requirements, and fixed without manual intervention. s
Based on inputs from a report by the Small Cell Forum titled “Small Cell Open RAN: A Catalyst for New 5G Business Models”