Open RAN to reach 15-20% of total market by 2027: Dell'Oro

According to Dell'Oro Group, the open RAN movement is chugging along, enough so that the analyst firm revised its forecast upward.

Open RAN is now projected to account for 15% to 20% of global RAN by 2027, according Dell'Oro Group’s most recent report. Previously, the firm said open RAN would account for 15% by 2026.

Stronger-than-expected open RAN progress in North America triggered the revision, according to a press release. The North American open RAN market is driven by Dish and Verizon, said Dell’Oro Group VP and analyst Stefan Pongratz via email, without going into further detail.

That reinforces what Dell’Oro said in December, when it reported that North America and the Asia Pacific regions accounted for more than 95% of the open RAN market.

From a revenue perspective, the top open RAN suppliers are still Samsung, Fujitsu and NEC for the 1Q22-3Q22 period, Pongratz said.

Geographically, the contribution from Europe to open RAN was still negligible in 2022, he said, but that could change as operators’ existing contracts with vendors are set to expire over the next couple of years.

In the U.S., layoffs at some of the early open RAN proponents, like Parallel Wireless and Mavenir, have led to questions about the viability of the open RAN space. However, Mavenir CEO President and CEO Pardeep Kohli told Fierce that its recent downsizing was tied to reductions in RCS demand, not about open RAN.

Meanwhile, the U.S. government wants to see a successful open RAN market as it seeks to foster more U.S.-based suppliers versus foreign-owned. The whole idea behind open RAN is to open standards and specifications so that more companies can participate, creating more competition.

Inevitable challenges

Regarding broader adoption beyond the early adopters, Pongratz said “the reality is that in contrast to 5G, there is no real marketing value behind open RAN, open vRAN, cloud RAN, etc. This means that any decision to switch to open RAN/open vRAN will be a decision based on business fundamentals, performance, TCO, and future growth prospects.”

Even with the most optimistic total cost of ownership (TCO) estimates, “it is difficult to justify ripping out existing equipment to accelerate this transition. But it is something the operators can consider when the time comes to order new equipment,” he said.

As with any technology shift, “there will be challenges,” he added. “In addition to the performance per cost gap between custom silicon and hybrid approaches relying on GPPs/accelerator cards, the technology leaders might not be as motivated to go down this path as some of the RAN suppliers with smaller footprints.”

Since maximizing performance and reducing TCO are the primary objectives, it will be important to close that technology gap between the leaders and the smaller suppliers, he said.