Two new open RAN reports issued this week showed revenue from sales of compatible hardware and software skyrocketed in Q1 2021 and predicted the technology could provide a significant boost to global GDP by 2030.
Dell’Oro Group VP and analyst Stefan Pongratz in a blog highlighted preliminary data that indicated a five-fold surge in open RAN revenue in the first three months of the year, driven in large part by uptake of the technology in Asia. Pongratz pointed to “a fairly synchronized migration from proprietary RAN towards Open RAN in Japan,” with Rakuten Mobile leading the way and other operators there “increasingly optimistic” about the technology.
He told Fierce market sentiment in the U.S. and Europe is improving, but it doesn’t expect to see the same kind of revenue ramp in those regions in the short term. “We do expect it will take more time given the pace of the greenfield rollouts in the U.S. and the state of the brownfields,” he said.
Still, given the strong Q1 results, Pongratz said Dell’Oro now expects open RAN revenues to nearly double in 2021 to a range of between $500 million and $1 billion. Earlier this year, Dell’Oro forecast open RAN would account for between 1% to 2% of the overall RAN market in 2021.
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In terms of mix, Pongratz said macro deployments are “driving the lion’s share” of revenue. While small cell rollouts associated with mmWave uptake are “encouraging, we still forecast macro to drive the open RAN market.”
Economics
Separately, Analysys Mason released a report that concluded adoption of open RAN and disaggregated network solutions could boost global gross domestic product (GDP) by hundreds of billions of dollars between 2021 and 2030. It is worth noting the study was sponsored by the Telecom Infra Project, which is working to develop and has heavily promoted open RAN kits.
The report argues open RAN “has the potential to accelerate improvements in connectivity and generate an economic impact.” It assumes that by 2030, approximately 55% of global mobile demand will be served over an open and disaggregated RAN.
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David Abecassis, a partner at Analysys Mason, explained the reasoning behind its economic benefit predictions, noting in a statement “the industry can hope to achieve improved unit economics, open up new investment opportunities in hard to cover areas and ultimately improve the resilience of telecoms supply chain” by using open RAN.
Analysys Mason forecast open RAN’s impact on global GDP would grow to reach $91 billion annually by 2030, cumulatively contributing $285 billion between 2021 and 2030. It added this estimate was conservative, noting the cumulative impact could reach as much as $725 billion, depending on adoption rates.
“Our analysis of the economic impact of open RAN demonstrates economic benefits can be significant, and we are seeing really good momentum across the industry in support of these technologies that makes us optimistic these benefits can be achieved and exceeded," Abecassis concluded.
Earlier this week, Mavenir announced it is deploying open RAN for a smart city project in Thailand and Japanese operator Rakuten Mobile added more open RAN vendors to its roster. Elsewhere, operator Millicom teamed with Parallel Wireless to rollout open RAN-based 4G service in Latin America, while Dish Network continued pushing toward the deployment of its greenfield open RAN network in the U.S.
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Dell’Oro’s Pongratz noted in the blog one key technology could help speed adoption of open RAN further: massive MIMO.
“Since more operators are suggesting performance parity with ‘traditional systems’ is expected, new massive MIMO entrants know what they need to deliver in terms of IBW, weight, size, TRX configurations, power consumption, and spectral efficiency,” he wrote. “The open RAN community has received the message loud and clear – broader open RAN adoption is to some degree hinging on the success of massive MIMO.”