Open radio access network (RAN) equipment grabbed a bigger slice of the pie in 2021, but that doesn’t mean things are going smoothly.

Revenue from open RAN radios and basebands more than doubled in 2021, according to Dell’Oro Group, but where and who is buying that equipment matters more to true market momentum. The market research firm also notes increased revenues are primarily the result of higher prices — something every human being feels with each passing day. 

Increased costs commanded by open RAN equipment doesn’t mean wireless carriers are flocking to adopt the architecture en masse. Quite the contrary.

The volume of 4G LTE and 5G open RAN gear shipped in 2021 met Dell’Oro Group’s expectations, but the majority was purchased by Rakuten Mobile and its competitors in Japan. Dish Network was likely high on that list too.

Greenfield Sure, But Brownfield? Not So Fast

This indicates the architecture largely remains a greenfield play, not something a leading operator will completely shift to any time soon. 

There’s no doubt operators want open interfaces and more competition in the RAN market, but “progress of the technology, especially with some of the non-traditional or non-top 5G RAN suppliers has perhaps not advanced at the same pace,” Dell’Oro Group VP Stefan Pongratz wrote in a blog post.

“This, taken together with the fact that the bulk of the share movements in the RAN market is confined to traditional suppliers, is resulting in some concerns about the technology gap between the traditional RAN and emerging suppliers,” he added. 

He counts more than 20 suppliers with commercial or forthcoming open RAN products, including at least six with massive MIMO capabilities. Nearly half of all current suppliers only play in the small cell market, Pongratz added. 

Dell’Oro still projects open RAN to capture 15% of the total RAN market by 2026. Global RAN revenues were in the range of $40 billion to $45 billion in 2021.

It’s a big market effectively controlled by a handful of players, which presents opportunities and challenges for all the major IT infrastructure vendors trying to elbow their way into the mix via open RAN.

Consolidation Remains Inevitable in Telecom

While open RAN represents a blossoming opportunity today, the history of the wireless industry suggests it won’t be long before consolidation occurs, leaving few companies in command of the market, Mike Thelander, president and founder of Signals Research Group, said at MWC Barcelona 2022.

“Just because there’s a rising tide, it doesn’t mean it lifts all boats,” he said.

Moreover, Thelander added, there are many areas to experience and test the performance of open RAN today. Dish Network’s 5G open RAN remains unavailable, at least commercially, so “that doesn’t really count,” and Rakuten Mobile has proven the technology can work in Japan, with caveats, he said.

Those caveats are important to note because Rakuten Symphony, the breakout company formed by the Japanese e-commerce giant to push open RAN architecture into more networks, is built around its own ecosystem of preferred vendors and tools, according to Thelander. 

True Open RAN Hard to Come By

“I don’t think it’s the truest definition of open RAN per se,” because operators can’t simply use it alongside equipment or software that isn’t part of its platform, he said. “You can call it open RAN if you want to, but I’m not sure that’s the vision the industry had when they first started talking about open RAN.”

Monica Paolini, founder and principal at Senza Fili, drove that point home, adding that a closed system remains at a higher level under Rakuten Symphony’s model.

Ironically, Rakuten Symphony was partly born out of necessity following the many challenges and delays Rakuten encountered during the testing, integration, and deployment of its open RAN in Japan.

Dish faces many of those same technical challenges almost two years later. It started and ended 2021 without a single score, missed every commitment it made along the way, and now appears to be running out of time to meet its obligations.

Rakuten Symphony certainly isn’t a tightly integrated piece of hardware with software, similar to what RAN incumbents sell so effectively today, but it also represents an admission of sorts that open RAN isn’t without its drawbacks.

While carriers want more competition and all the benefits that come with that, few are going to bet their multi-billion dollar businesses on a technology that might be more trouble than it’s worth.

Open RAN isn’t going away, but neither is traditional RAN. It could very well capture 15% of the market’s revenue in four years, but it’s also very likely to gain just a few percent of the total RAN installed base.

I love rooting for the underdog, but I also, as with many industry analysts, don’t expect open RAN to be pervasive in mobile network architecture until it becomes part of 3GPP standards and we’re all talking about 6G.