Research Overview

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 report 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 with relatively few core networks. Frost & Sullivan’s research indicates that the RAN made up approximately 68% of CSP expenditures on infrastructure in 2020 versus only 32% for transport and core networks combined. The percentage of RAN spend is projected to increase in 2025. Prior to the open and virtual RAN movement, 5 global suppliers (in alphabetical order Ericsson, Huawei, Nokia, Samsung, and ZTE) accounted for more than 90% of the RAN market. 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 believes that additional innovation resulting from a higher level of competition will return bigger dividends over the long term. Innovations have already come out of the O-RAN Alliance in their proposed architectural changes to the RAN that build upon the 3GPP standards. Some of these innovations are described in this study.