In 2013 through 2015, Mobile Experts published some cost-benefit analysis on “Cloud RAN” (including the impacts of both centralization and virtualization) that showed remarkable savings in costs and the benefits of flexibility. But we did not publish a forecast for LTE to adopt virtualization at that time because the big LTE networks had already been built, and none of the top 20 global operators were considering a "rip and replace" project to take out dedicated hardware to install COTS servers.
Today, a few big 5G networks are underway, and the ball is rolling for vRAN technology. Rakuten is a success. Dish has started deployment in the field. And the major network vendors are rolling the technology out for commercial use: Samsung is live with commercial vRAN operations at Verizon, Nokia has demonstrated carrier-quality performance with AT&T, and Ericsson is launching its Cloud RAN for “general availability.”
The big, established operators need to adopt this technology now, or wait for the next cycle. The American C-band network is starting its major deployment phase. If they deploy 250,000 base stations using dedicated processor hardware, we will never see an economic opportunity to rip that equipment out and replace it with COTS servers.
Similarly, the big C-band 5G network in China is about half built, and on hold because Huawei can’t buy high-performance semiconductors. I assume that we will see a political settlement in the next six months, and Huawei will be back in business. When China re-starts their massive MIMO deployment in 2022, they need to line up with the economics of Western hyperscale platforms. If they don’t, then they will be stuck with their proprietary hardware for the next several years, at an economic disadvantage.
From a technical point of view, virtual RAN was possible in 2015. We saw very convincing demonstrations at that time… but we didn’t publish a forecast over the past five years because we knew that none of the major operators would rip out their existing LTE networks in order to virtualize them. The market has been waiting for a suitable surge of new deployment that would justify the change in approach. It’s happening now, and we have just released a forecast for vRAN based on rigorous data collection.
We expect the American operators to cautiously deploy vRAN in their C-band networks over the next 2-3 years. Europe, India and the rest of the world will follow as they enter a phase of nationwide 5G deployment. Japan, Korea and other leaders will use the technology for their next phases (millimeter wave, new frequency bands). The transformation has started.
Core networks are already well on their way to virtualization and are migrating to cloud-native architectures now. Almost all of the top 20 operators have experience with VMs and are already moving into cloud-native core networks. The technology is ready. The ecosystem is mature. The testing is complete. For RAN, the moment is now.
Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.