Global spending on centralized radio access network (C-RAN) architecture networking gear is expected to reach $14 billion annually by 2020, according to SNS Research.
C-RAN is an architectural shift in RAN design, where the bulk of baseband processing is centralized and aggregated for a large number of distributed radio nodes. In comparison to stand-alone clusters of base stations, C-RAN provides significant performance and economic benefits such as baseband pooling, enhanced coordination between cells, virtualization, network extensibility, smaller deployment footprint and reduced power consumption, according to SNS.
While Japan and South Korea continue to drive a majority of commercial C-RAN investments, other operators in the rest of the world are keen to migrate toward C-RAN.
China Mobile, Orange, Telenor and Sprint (NYSE: S) already are testing the architecture. In fact, China Mobile has shown a 30 percent reduction in capex and a 53 percent reduction in opex in its C-RAN trials.
SNS Research estimates that global wireless network infrastructure spending on C-RAN deployments will grow at a compound annual growth rate (CAGR) of 23 percent between 2015 and 2020. By the end of 2020, C-RAN architecture infrastructure investments will account for nearly $14 billion. The investments will include spending on Remote Radio Heads (RRHs), C-RAN small cells, Baseband Units (BBUs) and fronthaul transport networking gear.
C-RAN slashes capex because fewer BBUs are needed, which reduces opex because fewer BBUs means less energy consumption and diminished maintenance costs. The reduced energy consumption makes C-RAN a "green" alternative, with China Mobile estimating 71 percent power savings vs. traditional RANs.
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