Omdia

Open RAN growth to reach 250% year on year

08 December 2020 | Melanie Mingas

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Open RAN is on track to see a year on year growth of 250% in 2020, despite the sector comprising a mere 1% of the total market.

The observation was published by Omdia, which attributed the growth to heightened activity in Asia.

Japan's Rakuten was hailed as a "big contributor to this growth" and Omdia noted that Dish Network is also expected to start deploying its own Open RAN network in 2021, which will further grow the market.

By 2024, with deployments from both greenfield and brownfield operators, Omdia said Open RAN will account for over 9% of the total RAN market.

Comparing 5G RAN to LTE RAN, Omdia further said that revenues from the former will outstrip the latter. On this point the report said that in comparison it took LTE around six years for LTE RAN revenues to surpass WCDMA RAN revenues.

Omdia said China's "early and aggressive adoption of 5G" played a big role in this with China accounting for around 65% of all 5G mobile infrastructure spend through first three quarters of 2020.

Daryl Schoolar, practice leader at Omdia, added: “5G has given the base station vendors a good 2020. Year over year revenue growth should be one of the strongest in over half a decade. Of course, this success has not been spread evenly between all vendor and markets. The stronger the vendor is in China’s 5G RAN market the better its year. It is remarkable that in around two years, even with Covid-19, 5G will overtake LTE in terms of base station investments.”

Omdia's report continued to say that while Open RAN as a market represents " less than a single percentage point of the entire market", that is on track to change in the coming years and this could have a "significant impact" on the market as a whole.

The report continued: "Vendors who ignore this trend risk loss of market share that can negatively impact them in the later part of the 5G network era and even into the 6G era. Vendors need to decide how to respond. Do they embrace Open RAN or do they fight it by providing operators with compelling reasons to shy away from Open RAN?"

In the base station market, a "very strong year" was recorded between Q1 and Q3, 2020, with sales revenues up 8% compared to 2019. Here, demand was driven by China, with Huawei accounting for one third of the market in Q3, giving the vendor the largest share for the quarter.

Huawei was followed by Ericsson, Nokia and ZTE, however, for 5G market share ZTE had the second largest share for the quarter. Huawei had the largest 5G market share with Ericsson coming in a close third behind ZTE.