Open RAN investment to outpace traditional equipment by 2027

A new study from ABI Research forecasts the Open RAN radio equipment market is set to flourish over the coming years, exploding to around $47 billion by 2026. This total will, for the first time, exceed the traditional RAN equipment market.

The research estimates that total CAPEX spent on outdoor radio units, including both macro and small cells, will reach around $40.7 billion, wile indoors equipment will still reach a considerable $6.7 billion. Total unit shipments are expected to reach 29.4 million.

2020 has already seen interest in Open RAN grow tremendously. The flexible, interoperable RAN components are rapidly becoming very appealing for operators, as technological advances begin to allow the new technology to challenge that of traditional RAN equipment vendors. 

Earlier this week, the Telecom Infra Project (TIP) noted that Open RAN tech was now being trialled in numerous countries around the world, including Turkey, the UK, Ireland, Mozambique, South Africa, UAE, Indonesia, Malaysia, Bangladesh, India, Russia, Peru, and the Democratic Republic of Congo. The organisation noted that this growth is driven by major players in their respective markets, including Deutsche Telekom, Telefonica, TIM, Orange, and BT. 

Similarly, the ORAN Alliance partnered with the GSMA back in summer to help boost the adoption of the technology as it relates to 5G. 

But beyond the growth and capabilities of the technology itself, it is the global environment which is driving the rise of Open RAN. With budgets strained by the global pandemic and supply chains rattled by volatile geopolitical sanctions, diversifying supply chains through Open RAN is an exciting opportunity.

“Trade wars and the global pandemic of COVID-19 have resulted in tremendous restrictions on the telecom supply chain and disrupt the evolution of new technologies. These effects will accelerate the development of Open RAN and open networks,” said senior ABI analyst Jiancao Hou.

ABI’s report drew special attention to greenfield players who are adopting Open RAN principles at scale, such as Japan’s Rakuten. A newcomer in the Japanese mobile market, Rakuten Mobile launched 5G last month using Open RAN architecture. 

“We must take a bit of credit about what we’ve done,” said Rakuten’s CTO Tareq Amin about their use of Open RAN. “We have innovated an architecture that was proprietary, that was closed and absolutely unwilling to evolve into an open RAN platform. We have driven a discussion in the world about the necessity of open RAN architecture.”

While to date Open RAN has primarily been the realm of smaller players, the Tier-1 vendors are beginning to take notice.

“New entrants will lead the early deployment for Open RAN, but they will be increasingly challenged by tier-one vendors and system integrators for both public cellular implementations and enterprise deployment,” said Hou.

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