Mobile Experts: Open RAN market drops 83% in 2024 as legacy carriers prefer single vendor solutions
As expected, the Open RAN market ‘screeched to a halt’ during 2024. Mobile Experts released a new report on Open RAN, which it described as ‘the most bizarre market growth profile ever seen in the wireless market.’ After ‘great success’ with deployment in greenfield networks by the DISH Networks in the U.S., Rakuten in Japan and 1&1 in Germany, the market research firm is predicting a significant slump this year with a very slow recovery (see chart below).
“Our revenue chart for Open RAN looks like the Grand Canyon,” said Joe Madden, Principal Analyst at Mobile Experts. “All of the big clean-sheet O-RAN deployments have finished their major buildout phase, so now the market will transition to upgrades on legacy networks. But legacy networks will use Open RAN differently.”
“Many people don’t understand why legacy mobile operators are rejecting the original Open RAN business model and are choosing a Single Software business model instead. This report provides clear guidance on why the market is fundamentally changing.”
……………………………………………………………………………………………………………………………………
Comment and Analysis:
The original Open RAN business model called for multiple vendors to provide the equivalent of a disaggregated base station. That is why it was dubbed “Open.” However, legacy carriers prefer a closed solution, where a single vendor is the primary supplier of hardware and software for an Open RAN system. This limits the supply chain diversification that O-RAN was designed to promote and pushes out new vendors. Some examples of single vendor Open RAN solutions include:
-
AT&T and Ericsson: AT&T’s five-year, $14 billion Open RAN contract is a single vendor Open RAN deal.
- Deutsche Telekom and Nokia: Deutsche Telekom’s contract with Nokia includes the initial deployment of Fujitsu radios in Northern Germany.
- NTT DOCOMO and Nokia: NTT DOCOMO will use Nokia as its vendor to deploy Open RAN.
- Verizon and Nokia and Samsung Networks: Verizon has been using “Open RAN-capable” virtual RAN (vRAN) systems from Nokia and Samsung Networks for several years, but that is not true Open RAN as per O-RAN Alliance specs. Verizon could evolve its vRAN deployments with Samsung Networks into an Open RAN architecture, following the recent appointment of Open RAN advocate Yago Tenorio as its CTO.
–>Meanwhile, there are still no official standards for Open RAN- only O-RAN Alliance specs.
The new report lays out the expected revenue in hardware (radios, servers, antennas) and software (vDU, vCU, RIC, xApp, rApp, and dApp) through 2029, as major operators like AT&T, Vodafone, Verizon, Telus, DoCoMo, and others begin to buy mobile infrastructure from alternative vendors.
“The US Government is pumping hundreds of millions of dollars into Open RAN,” continued Mr. Madden. “But sadly, the biggest challenge of Open RAN will not be addressed by NOFO and other government grants. Each grant will be too small to fix the fundamental economic challenge of Open RU hardware. The market will solve the problem anyway, without government help. Get our report for the details.”
Here’s a chart of Open RAN revenue by year:
Subscribers to the Open RAN 2024 report will receive:
- Full access to the 40-page Open RAN 2024 report;
- Clear breakdowns of the 5-year forecast in an Excel spreadsheet;
- Detailed technical background and architectural analysis;
- Insight into the pace of upcoming projects with legacy operators; and
- Access to the analysts behind the reports.
References:
https://www.telecoms.com/open-ran/open-ran-market-fell-83-in-2024
https://mobile-experts.net/reports/p/oran24?rq=open%20RAN
From TelecomTV:
Other Open RAN investments are planned by operators, such as KDDI in Japan, which is working primarily with Samsung Networks for its deployment, and Deutsche Telekom, while Telefónica continues to include Open RAN in its plans, notably in Germany but also at a group level.
However, that market uptick isn’t necessarily good news for all vendors involved in the Open RAN sector, as Madden notes the growing trend towards single software vendor, rather than multivendor, deployments, which means that whatever business there is will be concentrated with just a few suppliers: AT&T’s award of a major contract to Ericsson, which is the sole provider of cloud RAN and associated management and orchestration software for the US telco’s Open RAN rollout, being a key example of that trend.
And the overall value of the market isn’t much to shout about either, with Madden expecting annual Open RAN investment levels to not even reach $1.5bn by 2029, still some way off the levels seen in 2021 until 2023, despite significant investments from the US government into Open RAN R&D – see US allocates $420m for Open RAN radio unit R&D.
While Madden’s outlook will dent the hopes of Open RAN hopefuls, such as Mavenir, Parallel Wireless and the slew of vendors developing low-cost Open RAN radio units, other industry watchers are more optimistic, with long-time mobile network sector analyst Stéphane Téral predicting the market will be worth $8bn by 2029 – see Tier 1 telcos to drive Open RAN’s second growth cycle – report.
https://www.telecomtv.com/content/open-ran/open-ran-investments-plummet-report-51566/
Teral Research:
The broader open RAN landscape is under pressure, leading to consolidation, restructuring, and even some bankruptcies. However, Samsung Networks has emerged as the front-runner in the global open vRAN market, closely followed by NEC Corporation and Fujitsu Network Communications.
Looking ahead, real acceleration is expected in 2025, when Tier 1 operators like Vodafone join AT&T with large-scale open RAN rollouts. This will usher in a new phase of adoption, positioning open RAN for broader global uptake in the coming years. As a result, we expect open RAN to account for more than 30% of global RAN sales by 2030.
https://www.linkedin.com/pulse/whats-new-t%C3%A9ral-research-t-ral-research-dlt5c/