Virtualised RAN technology is finally coming into its own, with a major ramp-up imminent after years of debate over the speed that performance metrics are rolled out. It is now emerging as a key building block in telecom operators’ efforts to monetise their 5G networks.
The industry has been talking about vRAN for some time, but reality has thus far not matched the hype and deployments have been notable in their scarcity. But there are some seriously strong green shoots starting to emerge, from a technological and ideological perspective, and the future now looks bright for vRAN.
The Open vRAN market will see growth in 2023 – albeit lower than previously expected – and will expand at a CAGR of 33% over the 2022-28 period, noted market research firm LightCounting in September, adding that Open vRAN will account for more than 20% of total global RAN sales by 2028. “The good news is that there is a growing consensus all over the world that Open vRAN will become a major architecture component of mobile networks in the second half of this decade.”
Similarly, while Dell’Oro reported declining revenues across Open RAN and vRAN in the second quarter of this year for the first time since it began tracking the architectures some four years ago, it too remains fairly bullish. The slide was not unexpected and reflects the lag between the very early adopters who fuelled rapid growth in the early years of the technology and the start of mainstream adoption. The analyst firm still expects Open RAN revenues to account for between 5% and 10% of the overall RAN market this year.
While Open RAN and vRAN cannot be lumped together as one and the same thing, there is of course overlap and going forward most of the Open RAN will also be Open vRAN, explains Stefan Pongratz, vice president at Dell’Oro. “The adoption patterns between Open RAN and vRAN differed initially but now they are not that different and the deceleration in growth when comparing the first half of 2023 with 2022 applies to both Open RAN and vRAN,” he confirmed.
For revenues to tick upwards again, operators need to commit to rolling out the technology. In April, mobile industry research specialist GSMA Intelligence shared that just 18 operators worldwide had commercially deployed Open RAN networks, but added that more than 80 had shown interest or shared plans to do so.
Telecoms operators are clearly looking very closely at vRAN. And new developments from within the industry will help to overcome the final barriers to entry, which should help to drive growth in the coming years.
“For the first time we have something that is actually at par or better... to address the vRAN space,” said Geetha Ram, global head of telco compute at Hewlett Packard Enterprise.
To date, vRAN adoption has arguably been held back by a number of technical barriers, with issues such as its inability to match the performance level of a traditional RAN setup for the same power consumption, for example.
In June, Ericsson announced it had carried out an end-to-end Cloud RAN call using HPE ProLiant DL110 servers powered by 4th Gen Intel Xeon Scalable processors with Intel vRAN Boost, which provides integrated acceleration. That demonstration – an industry first – showed increased network capacity, performance, and energy efficiency for telecoms operators keen to tap into the flexibility and scalability benefits that vRAN brings. As well as addressing many of the technical issues facing the vRAN sector to date, such as performance per watt, it was also a positive development from a total cost of ownership (TCO) perspective.
That makes vRAN a credible option for telecoms operators, who are grappling with complex and demanding RAN workloads. And it’s about more than just the distributed unit (DU) portion of the RAN.
There’s also the centralised unit (CU) sitting at the edge of the network to take into account. In a traditional appliance-based architecture, if the CU is underutilised it remains so; there’s nothing an operator can do about that. But with vRAN, that spare capacity can be used during lower traffic periods to introduce other applications, such as AI inferencing applications, at the edge.
“That is huge because it takes the operators towards the monetisation part of 5G,” Ram explained. “You can put some edge applications where you have some spare capacity, where the servers are not fully occupied with the vRAN workload,” she said. “This is the first time we have that network architecture that can help the network operators towards their 5G ultimate goal, which is monetisation of 5G.”
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The stage is set for virtualised RAN; the technology is in place and the economics are starting to stack up. But adoption is not yet there. The early adopters are vocal in their support of vRAN, but the technology is some way off being available to the mass market. For the technology to take that next step in its journey, operators will need to be open to diverse architectures.
“We have been doing things in a certain way – purpose-built appliances type of network architecture. With doing things in a different way, of course, there are going to be challenges,” said Cristina Rodriguez, VP of the Network and Edge Group and GM of the Wireless Access Network Division at Intel. She points to an increased number of players in the ecosystem with “different ways to do things; different mindsets.”
But the industry is making progress. “We are proving that we are overcoming all the challenges,” added Rodriguez. “There is a lot of learning in the past couple of years that has been applied.”
Operator customers see three key challenges: business, technology and operations, explained HPE’s Ram. The technology piece is now in place and that, in turn, brings the TCO element. As a result, “operators are [now] looking towards the operations part... which means they are serious about deployment,” explained Ram.
“We are [at] a point of no return,” insisted Rodriguez. It’s no longer a question of if or when operators will embrace vRAN but how quickly. “The proof is there. We are seeing major operators in the brownfield and the greenfield deploying at scale with uncompromised KPIs, with fantastic operation metrics.”
Verizon is a prime example. The US operator is in the vanguard of vRAN rollout and, as of May 2023, had deployed more than 10,000 vRAN sites across its footprint, putting it well on the way to meeting its goal of 20,000-plus by the end of 2025.
At a national level, Japan has always been ahead of the pack. The market, “which became the world’s first Open RAN and Open vRAN nation in 2021, continues to prove the sceptics are wrong,” noted LightCounting. KDDI and NTT Docomo are leading the way when it comes to brownfield deployments, while Rakuten Mobile is ahead from a greenfield perspective, the analyst firm pointed out.
Indeed, vRAN is a key part of the Open RAN ecosystem experience (Orex) portfolio that NTT Docomo has developed alongside international vendor partners. Docomo unveiled the technologies and services that it will offer to other telcos under Orex in September, marking the latest milestone in its Open RAN journey.
KDDI, meanwhile, began switching on Open vRAN sites on its commercial 5G network in Osaka City in January 2023 and said it is hoping to achieve a full-scale rollout in 2024. “By offering an open, wireless system, KDDI aims to contribute to the expansion of equipment procurement options and the construction of high-performance, cost-effective infrastructure,” the company noted.
Those attributes outlined by KDDI will drive other operators to look seriously at vRAN and with the early adopters now scaling up, the outlook for 2024 is positive.
“In 2024, we're going to see a lot more of that,” said Rodriguez. When it comes to scaling up at a global level, the availability of servers, such as the HPE ProLiant DL110 Gen11, with the likes of the Xeon scalable processor with vRAN Boost, will make a difference, she added. “It will give the operators the technology they need to virtualise the network and the confidence to know they can have uncompromised KPIs.”
The vendor community are not the only ones who believe telcos have broadly embraced the virtualisation concept and that vRAN be made available to the mass market is just around the corner.
“Patience is needed, as we expect the global switch to Open vRAN to occur in the 2024-25 timeframe, driven by large Tier 1 CSPs around the world because, at this point, everyone is on board,” said Stéphane Téral, chief analyst at LightCounting, in September.
Going into 2025, companies like HPE and Intel will be looking at the next generation of technology development and pushing further on that all-important TCO metric.
“It’s only going to get better from here,” said Ram. “But 2024 has to be the year when we actually prove to everyone, including ourselves and the operators, that this can be done at scale.”
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