LightTrends Newsletter

The open RAN/vRAN market is pausing and regrouping to get ready for a big takeoff in 2025 - 1H23 Update

September 2023

LightCounting & TÉRAL RESEARCH release Open and Virtual Radio Access Network Report 1H23 Update

As rightly anticipated, our 1H23 findings confirm that the open RAN/vRAN market is softening and pointing to flatness through 2025 in the absence of a “relay” handoff between the early adopters—Rakuten Mobile, NTT docomo, and DISH, respectively—and the next ones, to create a robust pickup year. At the same time, the ecosystem continues to expand, and government funding keeps flowing worldwide to foster the development and the adoption of the novel architecture.

Japan, which became the world’s first open RAN and open vRAN nation in 2021 continues to prove the skeptics are wrong and push the detractors to retrenchment: NTT docomo and KDDI are in the Brownfield driver’s seat while Rakuten Mobile leads the Greenfield league, which in turn, sent Fujitsu and NEC to the leadership board. Our 1H23 findings point to the following vendor dynamics:

  • Fujitsu, NEC, Rakuten Symphony and Samsung are the top 4 players for total (all categories) open vRAN market shares.
  • NEC, Fujitsu, and Samsung are the top 3 RU vendors.
  • Fujitsu, Rakuten Symphony, and Mavenir are the top 3 CU/DU vendors.

This would have never been possible without the combination of the launch of the Telecom Infra Project (TIP) in 2016, the launch of the O-RAN Alliance in 2018, and the relentless U.S.-led 2018-2020 effort to convince dozens of nations including its allies to ban Chinese vendors from their 5G rollouts.

“The open RAN/vRAN market is unstoppable, looking up, and poised to rule the world and ruin the RAN establishment. Patience is needed as we expect the global switch to open vRAN to occur in the 2024-2025 timeframe, driven by large Tier 1 CSPs around the world because at this point, everyone is on board. But economics 101 suggests not everyone in the ecosystem will make it,” said Stéphane Téral, Founder of TÉRAL RESEARCH & Chief Analyst at LightCounting Market Research.

Consequently, the open vRAN market is set for a short-term (2023-2024) pause sustained by the usual suspects. Our 2023 forecast was revised downward but still shows growth. The good news is that there is a growing consensus all over the world that open vRAN will become a major architecture component of mobile networks in the second half of this decade. As a result, our 2022-2028 CAGR is 33% and open vRAN will account for more than 20% of total global RAN sales by 2028.

Finally, we believe open RAN is a serious contender for indoor use cases in general and open vRAN as a DAS replacement in particular because it offers the same benefits as DAS has been known for, but with greater flexibility and cost efficiencies. Led by JMA Wireless, open vRAN penetration in the indoor DAS segment will also penetrate the enterprise private wireless network space that is currently dominated by traditional RAN implementations.

About the report:

This report takes a deep dive into the virtualization and disaggregation of radio access networks and analyzes the various schools of thoughts ranging from basic virtualization of RAN functions (vRAN) to new open architectures such as open RAN, following the TIP initiative and the O-RAN Alliance specifications, designed to cut the dependency on proprietary RAN equipment supplied by the traditional vendors. The vRAN segment is taken from our existing RAN size and forecasts and broken down by 2G/3G/4G versus 5G, as well as by vCU/vDU and RU for each region, and also looks at the potential for indoor DAS replacement. The report covers a wide emerging ecosystem of vendors.

The 2Q23 Wireless Infrastructure report is available for download by our clients.

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