The fifth generation of wireless technology (5G) has arrived and is being rolled out globally. 5G is possible because of the contributions of previous generations of wireless communications and a number of disruptive technologies, each of which must be understood at least at a high level to paint a full picture of the industry. This study centers on open and virtual radio access network (RAN); while this subject impacts all generations of cellular technologies, the primary focus will remain on 5G. A communication service provider (CSP) network requires many RANs to cover a city, state, or region compared to a relatively few core networks. Prior to the open and virtual RAN movement, 5 global suppliers (Ericsson, Huawei, Nokia, Samsung, and ZTE) accounted for more than 90% of the RAN market. Frost & Sullivan estimates that CSPs in 2021 invested nearly $60 billion in their mobile and wireless network infrastructure—on public networks of all generations. The majority of that spend was on the RAN, with a smaller spend on the transport and core networks. Historically, the network infrastructure market has grown at a low, single-digit rate. With the transition to 5G, the growth rate has been higher but is beginning to return to historical norms. Competition leads to innovation and lower prices, which is a primary driver for key members of the CSP community in the O-RAN Alliance. Lowering costs is important to CSPs because RAN expenses account for the largest percentage of their network cost. However, Frost & Sullivan thinks that additional innovation resulting from a higher level of competition will return higher dividends in the long term. Innovations have already come out of the O-RAN Alliance in their proposed architectural changes to the RAN that build upon 3GPP standards.

Author: Troy Morley