Open radio access network (RAN) technology coupled with a collective push to disaggregate network infrastructure could add at least $285 billion to gross domestic product (GDP) globally by the end of this decade, according to new research from Analysys Mason.

Moreover, starting in 2030, open RAN could add $91 billion to global GDP annually, according to the report, which was commissioned by the Telecom Infra Project (TIP). TIP, the O-RAN Alliance, and multiple industry alliances among operators, vendors, and other stakeholders are developing standardized interfaces between different network components to foster a dramatic change in wireless network architecture.

"Open and disaggregated networks present a great opportunity for telecoms supply chains to transform radically. By building on operators' requirements through rapid innovation in hardware and software, the industry can hope to achieve improved unit economics, open up new investment opportunities in hard to cover areas, and ultimately improve the resilience of telecoms supply chain,” David Abecassis, partner at Analysys Mason, wrote in the report.

“We are seeing really good momentum across the industry in support of these technologies that makes us optimistic these benefits can be achieved and exceeded,” he added.

The research firm highlighted three areas that the industry should focus on to accelerate RAN disaggregation and generate the economic benefits it expects to flow from that effort. 

Open RAN needs more expansive platforms for testing and integration across operators, vendors, and systems integrators; strict, industrywide adherence to fully interoperable standards and implementations to prevent fragmentation; and far-reaching support, including funding, from policy makers across the globe to promote international alignment and adoption of open interfaces, according to Analysys Mason.

“A lack of coordination on key issues such as alignment in the adoption of open standards and refragmentation resulting in implementations that are not interoperable, would result in a reduction in the potential for open and disaggregated technologies to generate the envisioned impact,” the analysts wrote.

The baseline GDP gains predicted by Analysys Mason are qualified as a moderate adoption rate with medium efficacy. The upper end of its prediction, wherein open RAN experiences fast adoption and high efficacy, pushes the total global GDP increase to $725 billion.

Under the more conservative prediction of $285 billion, the analysts expect almost 63% of that to be generated by higher data usage and the remainder to derive from greater mobile internet availability.

Projections about the pace of open RAN pickup are varied among industry analysts. Analysys Mason predicts open network equipment will overtake proprietary RAN vendor kits around 2028.

Dell’Oro Group predicts open RAN will near 10% of the total RAN market by 2025. Sales of open RAN basebands and radios, including software and firmware, captured less than 1% of the RAN market in 2020, according to Dell’Oro Group.

Growth is surging, however. Open RAN revenues from baseband hardware and software increased fivefold during the first quarter of 2021, according to Dell'Oro Group. That pace of year-over-year growth gave Dell'Oro Group the confidence to up its short-term outlook. It now expects open RAN revenues to nearly double this year.

The pursuit of a more competitive market for network equipment will allow new companies to enter the space with specialized offerings and emerge in local markets that currently have to import all required equipment, according to Analysys Mason. “Incumbent vendors would have less control over operator roadmaps, but could find new ways to remain competitive in the ecosystem,” the analysts added.

Open RAN is currently being trialed or deployed in Brazil, India, Indonesia, Ireland, Japan, Malaysia, Peru, Turkey, United Arab Emirates, the United States, and United Kingdom, according to the research firm and TIP.

“Disaggregated networks are the future, and they are being built at speed in the present. The value of those networks is evident. If we double down on investment now, it will pay dividends in the future,” TIP Executive Director Attilio Zani said in a statement.