Open RAN gives Communications Service Providers (CSPs) more choice and flexibility to deploy their radio networks. It is expected to become a vital component for the future success of 5G. As the RAN buildout is the biggest investment in the 5G network, the ability to extend radio capacity quickly and efficiently will determine how CSPs can deploy and monetize 5G services.
To gain insight into what leading service providers are currently thinking about Open RAN and its potential financial impacts, Dell Technologies and Intel Corporation recently co-sponsored two reports by ACG Research:
- Using Open Virtual RANs in 5G: CSPs’ Perspectives and Economic Analysis focuses on the RAN design alternatives that CSPs are considering and the benefits and challenges they perceive in those alternatives.
- The Economic Benefits of Open RAN Technology looks at the total cost of ownership of RAN infrastructure decisions, including virtual Open RAN systems going forward.
ACG Research found that every CSP they spoke with was keenly interested in virtual Open RAN systems, while also actively engaged in helping to develop specifications through the O-RAN Alliance. CSPs planned to continue evaluating, testing, and validating Open RAN technology through 2022, with broader deployments expected to take place between 2023 and 2025.
Among the CSPs that ACG Research interviewed, there was consensus around the perceived benefits of Open RAN architecture, including:
- Supplier Choice – this was a benefit cited by every CSP ACG Research interviewed. There is a strong belief that the flexibility to choose suppliers will lower costs from the current proprietary RAN model.
- Service Differentiation – 5G opens a new world of revenue opportunities for service providers, particularly in enterprise markets. The ability to differentiate service offerings will be critical to their success, and Open RAN will be an enabler.
- Lower TCO – Open RAN promises lower TCO, but CSPs acknowledge this is not yet proven. It is still unclear what the TCO impact will be working with best-of-breed suppliers on a mix-and-match basis. However, the consensus is that open radios and architecture will drive more vendors and lower overall costs.
- Flexible Integration into Operations – Open RAN will allow CSPs to harness the openness and programmability of deployments to streamline current operating procedures.
- Spectral Efficiency – Open RAN allows CSPs to maximize the use of the licensed spectrum with radio control functions for overall greater spectral efficiency.
Despite broad enthusiasm for Open RAN technology, the companies researched also recognized that challenges currently exist in adopting this technology in their networks. For example, many of them felt that multi-vendor Open RAN solutions could lead to more extended testing and validation times. There were also concerns that only a few Open RAN vendors were currently ready to offer a proven solution. Open RAN requires new staff skills for new network architectures, radio capabilities, component designs, and transport network (fronthaul) requirements. Finally, the scale of 5G’s anticipated RAN growth and the need to integrate these new RAN resources into existing operations and management systems are possible barriers to rapid deployment. While CSPs understand these challenges, there is a consensus belief that Open RAN benefits will far outweigh these challenges.
The second ACG Research report focused on the financial aspects of Open RAN and the impact on TCO. The report analyzes varying Open RAN architectures, specifically distributed RAN and Centralized RAN, to understand each approach’s financial implications better. The paper reviews different scenarios, including Open RAN vs. traditional physical RAN. The cost-benefits of open architecture, including O-RAN compliant radios, virtualized CU, and DU functions running on x86 servers, are modeled.
The TCO comparison analysis used an economic modeling platform that is usable and customizable for any CSP Open RAN analysis. The model includes these RAN architectures:
- Distributed Physical RAN
- Centralized Physical RAN
- Distributed Open RAN
- Centralized Open RAN
In general, the ACG Research model depicted Open RAN architectures providing lower TCO compared to physical architectures. The TCO savings vary based on various factors but range from 28% to 35%, with most of the savings attributed to CapEx savings.
The ACG Research reports confirm the promise of Open RAN technology and the benefits that CSPs are expecting to receive. Dell Technologies understands the importance of Open RAN to CSPs and is actively developing Open RAN solutions with an ecosystem of partners. Our goal is to provide complete and end-to-end Open RAN solutions to our customers globally. Stay tuned for additional information on our progress. In the meantime, we encourage you to read both reports (they’re free) and then start a conversation with us about your transformation to Open RAN and about how Dell Technologies can help.