Dell’Oro said the O-RAN segment already comprises a mid-single digit share of the broader RAN market
Open RAN (O-RAN) revenues are forecasted to account for more than 15% of the global RAN market by 2027, as the market is experiencing a slower growth than initially projected, according to a recent report by Dell’Oro Group.
According to the study, the O-RAN segment already comprises a mid-single digit share of the broader RAN market.
Dell’Oro revised downwards its overall estimate of the growth of O-RAN. Following three years of O-RAN revenues accelerating at a significantly faster pace than expected and multiple upward forecast adjustments, this is the first downward forecast revision since the firm started tracking O-RAN, reflecting some hesitancy about the next-generation architectures.
The research firm noted that what is complicating the analysis is the fact that O-RAN adoption has been mixed across the greenfield and the brownfield operators. With greenfield and early adopter brownfield deployments maturing, the reality the industry is now facing is that it will take some time for the other segments to match and offset the more stable trends with the early adopters, according to Dell’Oro.
“We can think of this revision more as a near-term calibration than a change in the long-term growth trajectory,” said Stefan Pongratz, vice president and analyst at the Dell’Oro Group. “This journey of ‘re-shaping’ the RAN was never expected to be smooth and many challenges remain. Even so, our long-term position has not changed. We continue to believe that O-RAN is here to stay, and the growing support by the incumbent suppliers bolsters this thesis.”
The study also showed that the cumulative O-RAN revenues have been revised downward by 5-10% through the forecast period.
The European operators are ahead of the rest of the world when it comes to announcing O-RAN targets, but they have been more cautious with deploying O-RAN, focusing on building out 5G using traditional RAN. The baseline forecast, which assumes more delays in Europe, is for the European O-RAN market to surpass $1 billion by 2027 and eventually be one of the leading markets from an Open RAN/RAN perspective, the study stated.
In April, European operators Deutsche Telekom, Orange, Telefónica, TIM and Vodafone have published further documents on technical priorities for O-RAN.
The carriers said that the Open RAN Technical Priorities Release 3 is an update of the two previous releases from June 2021 and March 2022, all of which are the result of the work carried out under the MoU on O-RAN signed by these European operators.
While Release 1 focused on the main scenarios and technical requirements for each of the building blocks of a multi-vendor Radio Access Network, Release 2 focused on intelligence, orchestration, transport and cloud infrastructure, addressing also the energy efficiency goals and targets to support sustainable O-RAN, the carriers said.
Now, Release 3 “has primarily focused on developing further requirements on SMO and RIC while other areas have been significantly enhanced such as Cloud Infrastructure, O-CU/O-DU and O-RU. Moreover, this new release focuses in more detail on security topics and various challenges introduced by the disaggregation promoted by the O-RAN architecture. In particular, the security requirements are now contained within a dedicated section of the MoU Technical Priorities document,” the release reads. The telcos also highlighted that energy efficiency topics were also analyzed in more detail, with new requirements identified in various streams; for example, cloud infrastructure, O-CU/O-DU, RIC use cases and RAN features.
