Open RAN 1 - Driving New Network Economies, Efficiencies and Experiences

We are entering the next phase of the digital era where connectivity, automation and artificial intelligence will propel the human race like no other time. Consumers and businesses expect instant gratification in their highly-secure connected experiences while businesses are adjusting product decisions based on real-time trends in product demand. High-speed networks are linking data sources with incredibly powerful smart-applications that provide business insights not previously available. Today’s technologies are coming together to deliver access to this information we all need. 

For mobile operators keeping pace with the ever-increasing user expectations for instant access to data, networks need to be agile so that they can evolve, scale, and launch new innovative services to keep up with demand. At the same time, the operators face the challenges of efficiently managing their CAPEX and OPEX to sustain profitable growth in data revenues. Managing CAPEX and OPEX is critical as continuous growth in data traffic can drive the total cost of ownership (TCO) of mobile access networks by as much as 300%.

In this context, mobile operators are evaluating their approach to Radio Access Network (RAN), which forms the biggest CAPEX cost component. This evaluation is needed to meet the twin objectives of making the networks agile enough to quickly launch new services and to meet consumer expectations and significantly save on CAPEX and OPEX.

How will Open RAN make all that happen?

Many operators have deployed centralized or cloud RAN (cRAN), and those who have claim to have significantly reduced their LTE RAN CAPEX² and OPEX – some claiming to have reduced their CAPEX by up to 50%³. With cRAN solutions, operators are moving the baseband units from the cell sites to create a more centralized, dynamic architecture. Even with this centralized deployment, the radio unit cost remains the same as in conventional deployments as these solutions still primariliy rely on proprietary implementations from vendors.

Open RAN intends to remove this dependency on proprietary implementations from vendors. It provides an architecture where centralized baseband components of the RAN connect with remote radio units (RRU) over a standardized open interface. This new architecture provides the operator with deployment flexibility that breaks vendor lock-in. With Open RAN, operators have the ability to choose best in breed network components for their specific deployment requirements, which can bring down their overall RAN CAPEX and OPEX further.

With 5G, mobile network operators expect to reduce their 5G network CAPEX by 30 to 50%, and believe that an Open RAN architecture will help them significantly reduce their 5G CAPEX when compared to 4G⁴. For instance, Deutsche Telekom has said an open RAN architecture will likely reduce its 5G CAPEX bill by at least 50% compared to 4G⁵.

However, we believe Open RAN is about much more than RAN CAPEX and OPEX savings. Consumers today are demanding new services faster than ever – yet, changes in the legacy RAN architecture required for these new services and applications can be time-consuming, inefficient and expensive. Alternatively, using a disaggregated and virtualized RAN architecture with open interfaces leads to more flexible deployment options. With the programmability provided by Open RAN, operators have the ability to launch new applications and services without being dependent on a vendor. Aas operators will be able to bring new services to the market faster, they will be able to monetize them faster. All this will take the consumer experience to a new level.

A reduced RAN CAPEX combined with the ability to program RAN for new services and applications means operators will have more flexibility and less risk when trying out new use cases. The current proprietary architecture that operators use creates business case challenges largely due to high RAN CAPEX of the components involved that lack small cell/macro interworking, HetNet interoperability and standards, and mature automation/virtualization⁶. With Open RAN, operators can expect solutions that provide better ROI for use cases like private enterprise networks, indoor & venue coverage (high traffic locations), and rural networks (low traffic locations).

Open RAN is a win-win for all – network operators benefit from lower costs and the ability to bring new services to market faster while users have access to new services when they need them and to smoother operating networks. Operators benefit from an improved ability to manage network performance-related challenges (like adding capacity and coverage where required).