Dell’Oro Group increases Open RAN radio and baseband revenue forecast
Dell’Oro Group has revised their Open RAN radio and baseband forecast. Total cumulative Open RAN revenues are now projected to approach $10B to $15B between 2020 and 2025.
“The momentum with both commercial deployments and the broader Open RAN movement continued to improve during 1H21, bolstering the thesis that Open RAN is here to stay,” said Stefan Pongratz, Vice President and analyst with the Dell’Oro Group. “We are adjusting the forecast upward to reflect the higher baseline and the improved pipeline,” continued Pongratz.
Additional highlights from the Dell’Oro Group Open RAN Advanced Research Report:
- Open RAN revenues are expected to account for more than 10 percent of the overall RAN market by 2025, reflecting healthy traction in multiple regions with both basic and advanced radios.
- Open RAN Massive MIMO projections have been revised upward to reflect the improved competitive landscape and the improved market sentiment with upper mid-band Open RAN.
- The shift towards Virtualized RAN (V-RAN) is progressing at a slightly slower pace than Open RAN. Still, total V-RAN projections remain relatively unchanged, with V-RAN expected to approach $2 B to $3 B by 2025.
Separately, Stefan wrote:
The long-term open RAN vision is built on three key pillars including open interfaces, virtualized technologies and vendor neutral multi-vendor deployments. In addition to leading the industry toward open and interoperable interfaces, the long-term roadmap maximizes the use of COTS hardware and minimizes the reliance on proprietary hardware (O-RAN Alliance).
Taking into consideration that one of the primary objectives is to capture the overall movement toward open RAN and the fact that it will take some time to realize the broader vision, it is somewhat implied that there will be room for interpretation when it comes to capturing this movement and tracking the open RAN market.
And within each of these pillars, there will be various degrees of compliance. Multi-vendor deployments are often associated with mixing and matching baseband and radio suppliers. But when Mavenir introduced the term “True Open RAN,” it meant true mixing and matching across the board – they want to work with anyone with any component. If someone gives them a radio they should be able to integrate it with their software. And vice versa, if another supplier provides the software “True Open RAN” would enable them to make it work with their Massive MIMO radios.
Not surprisingly, there is room for interpretation with the other building blocks as well. Open RAN compatible radios are now proliferating across the supplier landscape. But it is not always clear after browsing the data sheets what this entails from an open RAN specifications, customization and coverage perspective. With five interfaces (A1, E2, O1, O2, Open FH), multiple functions (SMO, Non-Real time RIC, Near-Real-Time RIC), and a confluence of profiles, there is not an abundance of confidence that the open RAN maturity would be consistent across the board.
The Dell’Oro Group Open RAN Advanced Research Report offers an overview of the Open RAN and Virtualized RAN potential with a 5-year forecast for various Open RAN segments including macro and small cell, regions, and baseband/radio. The report also includes projections for virtualized RAN along with a discussion about the vision, the ecosystem, the market potential, and the risks.
To purchase this report, please contact [email protected]
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Rebuttal: Open RAN Forecasts Way too High!
While not a market analyst cranking out forecasts, this author believes the Open RAN market will be a huge disappointment and revenues will be much lower than Dell’Oro and other market research firms forecast.
As Light Reading has correctly said, Open RAN is trading one type of vendor lock-in for another.
Trading one version of vendor ‘lock-in’ for another? Image Credit: Light Reading
That’s because the O-RAN Alliance specs have not led to vendor neutral interoperability, but rather partnerships amongst vendors to provide a complete Open RAN solution.
O-RAN Alliance Threatened:
The O-RAN Alliance is in a crisis because of U.S. sanctions against Chinese vendors in the group has troubled Nokia and Ericsson. In particular, the recent addition to the American “entity list” of three Chinese members of the Alliance. Kindroid, a semiconductor company, Phytium, a supercomputing company, and Inspur, a compute server vendor, have been accused of working with the Chinese military, and have joined 260 other Chinese companies, including, Huawei, on the entity list.
A few days after Nokia decided to suspend its technical activity with the O-RAN Alliance, in fear of American punishment over its engagement at the forum with companies recently put on the American “entity list,” Ericsson expressed similar concerns.
It should not be a surprise that, given O-RAN Alliance’s legacy (born out of a merger of the American-led xRAN Forum and the Chinese-led C-RAN Alliance), there are a strong Chinese contingency. According to Strand Consult, by the end of 2020, 44 of the 200 odd Alliance members are companies from China. Also of concern is this post by Mr. Strand, What NTIA won’t tell the FCC about OpenRAN.
References:
Open RAN Forecast Revised Upward, According to Dell’Oro Group
https://www.fiercewireless.com/tech/not-all-open-ran-same-industry-voices-pongratz
https://techblog.comsoc.org/?q=Open%20RAN#gsc.tab=0&gsc.q=Open%20RAN&gsc.page=1
https://techblog.comsoc.org/?q=Open%20RAN#gsc.tab=0&gsc.q=Open%20RAN&gsc.page=2
https://techblog.comsoc.org/2020/12/04/omdia-and-delloro-group-increase-open-ran-forecasts/
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“Nokia’s commitment to open radio access networks (RAN) and the O-RAN Alliance, of which we were the first major vendor to join, remains strong. At this stage we are simply pausing technical activity with the alliance as some participants have been added to the U.S. Entity List and it is prudent for us to allow the alliance time to analyze and come to a resolution,” a Nokia spokesperson said in a statement.
Separating Chinese-government owned companies from the O-RAN Alliance is unlikely. The group was formed in 2018 when the C-RAN Alliance, a Chinese group, merged with the xRAN Forum, a group founded by AT&T, Deutsche Telekom, and SK Telecom.
“To address Nokia’s concern, we reasonably expect that the White House will clarify things and issue licenses to allow companies to sit on the same key industry groups as Huawei in the O-RAN Alliance, just like it has done in the past for the operators’ association GSMA, standard-setting bodies like IEEE, ETSI, and ISO and U.N. telecoms group ITU, without being in violation of the entity list rules,” Eugina Jordan, VP of marketing at Parallel Wireless, said in a statement.
https://www.sdxcentral.com/articles/news/nokia-freezes-o-ran-alliance-work-over-chinese-meddling-worries/2021/08/
The very recent assessment of the O-RAN Alliance by the European Commission (EC) is that it does not obviously meet WTO transparency requirements because it does not make essential information “easily accessible to all interested parties.” The group’s procedures, moreover, are “not open in a non-discriminatory manner during all stages of the standard-setting process.”
Perhaps the most worrying aspect of the group is the veto it effectively gives to founding members. In the paper it published just last month, the EC notes that “although interested contributors have opportunities to contribute to the elaboration of the specifications, the founding members have a privilege, because they have the necessary minority of more than 25% to block proposals.”
These founding members, according to the O-RAN Alliance’s own website, comprise AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo and Orange. Their identities should not influence any WTO judgement, but the inclusion of China Mobile in that inner sanctum may horrify some US politicians. In June, the White House imposed financial sanctions on China Mobile as part of the “military-industrial complex of the People’s Republic of China.”
Inconsistency reigns
In its recent paper, the EC stops short of delivering a final verdict on the O-RAN Alliance, instead calling for an “independent assessment” of its status. But to ensure it is compliant with US law, the group may have to become more transparent and make changes to its modus operandi. That will probably not be easy. Removing the veto held by founding members, in particular, could meet resistance. And transparency has not come naturally so far. Journalistic enquiries are left to moulder for days without being answered. At the time of writing, it had not responded to questions on this topic sent on September 1.
But if the O-RAN Alliance is opaque, successive US governments have already shown they are not afraid of inconsistency. ZTE was taken off the trade blacklist in 2018 after paying multi-billion-dollar fines, replacing managers and agreeing to be supervised by US regulators. Yet its links to the Chinese government are far more obvious than Huawei’s. If Huawei and far smaller Chinese companies are a security threat, then why isn’t ZTE?
https://www.lightreading.com/open-ran/o-ran-alliance-open-by-name-closed-by-nature-reckons-europe/a/d-id/771897?
“The Nokia announcement is part of an effort to make open RAN a political issue,” Monica Paolini, principal analyst at Senza Fili, told SDxCentral. “Open RAN is not a Chinese, U.S., Western Europe technology. This is something that has been growing with the contribution of multiple countries, different viewpoints, and the result is a new model for the RAN that is open, that is very flexible, that allows operators to do different things.”
The O-RAN Alliance is one of the most powerful multinational organizations developing technical specifications for open RAN, but it’s not the center of power. Some operators and vendors are pushing ahead on open RAN irrespective of the status of activities at the O-RAN Alliance.
Frontrunners like Rakuten Mobile, Dish Network, Telefónica, and others “are not waiting for the O-RAN Alliance to plan and build their open RAN networks,” Light Counting’s Stephane Téral said.
“I believe this event reflects some friction within the alliance. Let’s not forget that every member company has its own agenda, and in the end the open RAN market is finite and cutting into the oligopolistic traditional RAN market,” he added.
https://www.sdxcentral.com/articles/news/can-o-ran-alliance-contain-fallout-from-nokias-geopolitical-posturing/2021/09/