Open RAN provides silver lining to gloomy RAN forecast
Telecom analyst firm Dell’Oro Group has published a new report forecasting a continued decline in overall RAN revenues through to 2028. The market contraction, which started quite dramatically in 2023 with an 11% drop, comes in stark contrast to the remarkable 40 to 50 percent increase experienced by the market between 2017 and 2021. And while the decline is predicted to slow over the next few years to a rate of 2% CAGR, market conditions are set to remain challenging for the broader mobile infrastructure and RAN markets. According to the report, the Asia Pacific region will lead the decline, while North America is set to see the quickest recovery.
“It is not a surprise that there is rain after sunshine,” said Stefan Pongratz, Vice President for RAN market research at Dell’Oro Group. “In addition to MBB-based coverage-related challenges, this disconnect between mobile data traffic growth and the capacity boost provided by the mid-band, taken together with continued monetization uncertainty, is clearly weighing on the market,” continued Pongratz.
That said, there is some good news amidst the gloom, with Dell’Oro forecasting growth in several RAN segments during the same period, despite the overall negative outlook. These include 5G NR, FWA, mmWave, Open RAN, vRAN, private wireless, and small cells.
This view is shared by Juniper Research who have also just published their own Open RAN forecast. According to their report, operators will invest $39 billion in Open RAN over the next five years rising from $2 billion a year in 2024 to $11 billion by 2029. This will translate to about 19% of all base stations being Open RAN compliant by 2029.
Predicting a more than doubling of data use over the next four years, Juniper Research has identified AI-based traffic steering as a crucial service enabled by O-RAN. Traffic steering allows operators to maximise the efficiency of networks through the automated routing of cellular traffic to maximise network resources.
Research author Alex Webb remarked: “Operators must leverage AI-based traffic steering to improve connectivity services, such as enhanced mobile broadband, with network traffic generated by these connections being given priority steering to the base station offering the lowest latency to maximise the value proposition for users.”
A similar view was echoed by AT&T CEO John Stankey who recently outlined the central role Open RAN will play in helping AT&T grow its network capacity more sustainably.
