OPEN RAN Market Outlook (O-RAN) - An Opportunity worth $32 Billion by 2030

An Opportunity worth $32 Billion by 2030

OPEN RAN transforms Radio Access Network (RAN) technology from design to operation of the network. OPEN RAN creates the possibility of an open RAN environment, with interoperability between different vendors over defined interfaces. In a legacy mobile network ecosystem, RAN is proprietary where a single vendor provides proprietary radio hardware, software, and interface to enable the mobile network to function. RAN ecosystem is evolving towards proving the competitive landscape of RAN supplier ecosystem and network operators embracing the transformation. Opening up RAN horizontally brings in a new range of low-cost radio players, and it gives mobile operators a choice to optimize deployment options for specific performance requirements at a much better cost.

In December 2021, the UK Department of Culture, Media and Sport (DCMS) announced that it has agreed with the four domestic operators to fulfil a goal to boost deployments setting a target of 35% of the nation’s mobile network traffic is carried over open RAN by 2030. The department also increased funding of £30 million to a total of up to £51 million to back projects for trials of open RAN and next-generation technology. As per this latest market research, OPEN RAN Market is expected to cross $32 Billion by 2030 with a growth rate of 42% for a forecast period between 2022 and 2030. Services are going to be the key contributor to this market with a 40% share in 2030. 

Key Drivers

OPEN RAN is expected to accelerate the deployment of new network equipment and functions, with higher cost-efficiency. The improved connectivity because of OPEN RAN is likely to have a macroeconomic impact on GDP. An increase in mobile internet penetration and mobile data consumption are expected to be the major factors that would contribute to GDP because of OPEN RAN deployments. The ability to deploy networks with more flexibility and with higher cost-efficiency will improve the economics of increasing mobile internet penetration, by enabling more cost-efficient deployment of coverage, and also by reducing price levels to offer affordable mobile internet services in low-income Markets.

OPEN RAN will reduce the total cost of ownership and will lead to greater price competition because an open platform lowers the barriers for new vendors to enter the market and enables operators to deploy network elements from a range of suppliers. A software-based network, in which some network functions are run on general-purpose cloud infrastructure, will be cheaper to deploy and run than an integrated platform. Further, expanding the number of suppliers engaged in developing RAN software will result in a broader skills base and lower-cost access to developer and lifecycle expertise.

OPEN RAN Market - Highlights

• While 5G offers superior performance over 4G, both will coexist comfortably into the 2030s as the bedrock of next-generation mobile networks. There are three perspectives that help to underline this point. Firstly, unlike voice-oriented 2G and 3G (which were primarily circuit-switched networks with varying attempts to accommodate packet-switching principles), 4G is a fully packet-switched network optimized for data services. 5G builds on this packet switching capability. Therefore, 4G and 5G networks can coexist for a long while because the transition from 4G to 5G does not imply or require a paradigm shift in the philosophy of the underlying technology. 5G is expected to dominate the OPEN RAN market with $22B TAM in 2030 with a growth rate of 52% as compared to a 4G growth rate of 31% between 2022 and 2030
• Within OPEN RAN radio unit (RU), Small cells and macrocells are likely to contribute $7.5B and $2.4B TAM by 2030 respectively. It is going to be a huge growth of 46% from the current market size of $327M for such cells in the OPEN RAN market
• The sub-6GHz frequency band is going to lead the market with a 70% share for OPEN RAN although the mmWave frequency band will have a higher CAGR of 67% as compared to 37% CAGR of Sub-6GHz. Most focus has been on the 3.5 GHz range (i.e., 3.3-3.8 GHz) to support initial 5G launches, followed by mmWave awards in the 26 GHz and 28 GHz bands. In the longer term, about 6GHz of total bandwidth is expected for each country across two to three different bands
• Enterprises are adopting network technologies such as private 5G networks and small cells at a rapid rate to meet business-critical requirements. That’s why public OPEN RAN is expected to have the majority share of round ~95% as compared to the small market for the private segment
• At present, it is relatively easy for greenfield service providers to adopt 5G open RAN interfaces and architectures and it is extremely difficult for brownfield operators who have already widely deployed 4G. One of the main challenges for brownfield operators is the lack of interoperability available when using legacy RAN interfaces with an open RAN solution. Still, Mobile network operators (MNOs) throughout the world, including many brownfield networks, are now trialling and deploying Open RAN and this trend is expected to grow with time to have a larger share of brownfield deployments
• Asia Pacific is expected to dominate the OPEN RAN market with nearly 35% share in 2030. OPEN RAN market in the Asia Pacific is expected to reach USD 11.5 billion by 2030, growing at a CAGR of 34% between 2022 and 2030. Japan is going to drive this market in the Asia Pacific although China will emerge as a leader in this region by 2030. North America and Europe are expected to have a higher growth rate of more than 45% although their share will be around 31% and 26% respectively in 2030

OPEN RAN vs Traditional RAN

RAN accounts for approx. 60% of total network cost and OPEN RAN presents an opportunity to reduce CAPEX. RU, CU, and DU built on open architecture will lead to a reduction in deployment and operational cost as compared to traditional proprietary base stations in a mobile network. Open RAN will result in more competition, vendor security, faster update cycle, and user benefits as new features can be added more quickly for end-users, operators can provide enterprise-level services to support industry 4.0

OPEN RAN vs vRAN

In virtualized RAN (vRAN) also referred to as Cloud RAN, baseband functions, such as L1, L2, L3 and transport processing, are run by general-purpose processors, on top of any commercial off-the-shelf (COTS) computing platform. Until now, baseband used to run in purpose-built hardware (HW) using either ASIC or CSSP (Custom Specific Standard Product) type of System-on-Chips (SoC). vRAN enables the baseband and radio software and hardware, and even different components of the software and hardware, to be supplied by different vendors.

OPEN RAN/vRAN Comparison

OPEN RAN

• COTS-based BBU
• Open interface software 
• COTS-based RRU
• Open interface
• Baseband hardware, software and radios can come from multiple vendors

• COTS-based BBU
• Proprietary software 
• Proprietary RRU
• Proprietary interface 
• Baseband software and radios must come from same vendor

Key Questions Answered

• What is the market size and forecast of the Global OPEN RAN Market?
• What are the driving factors and impact of COVID-19 shaping the Global OPEN RAN Market during the forecast period?
• Which are the products/segments/applications/areas to invest in over the forecast period in the Global OPEN RAN Market?
• What is the competitive strategic scenario for opportunities in the Global OPEN RAN Market?
• What are the technology trends and regulatory frameworks in the Global OPEN RAN Market?

Keywords: OPEN RAN Market, O-RAN Market, Open Radio Access Network Market, Radio Access Network Market, OpenRAN Market, vRAN Market