Can Open RAN be the silver bullet for rural connectivity?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Ankit Agarwal, Managing Director at STL, looks at the potential for Open RAN to resolve coverage issues.

Open RAN is becoming a hot topic of discussion within the telecom community of the United Kingdom. The government has set a goal to boost Open RAN deployments considerably, aiming to reach a target of 35% of the country’s mobile network traffic being carried over Open RAN by 2030.

Many other economies would take similar steps especially as 5G matures and 6G becomes closer to reality. It would be interesting to see, though, how different economies would leverage Open RAN. TIP has predicted that Open RAN will cover 15% of the total RAN market by 2025/26. Initially brown field telcos will deploy the Open RAN in tier 2 market alongside Rural area & based on system maturity, telcos will start to bring the same in Urban area.

Open RAN Economics: A pragmatic rural choice 

Certainly the improved network economy of Open RAN suits the more distributed topography of a rural network. Open RAN removes the risk of costly vendor lock-in, and increases competitiveness, which have a huge impact on CAPEX. As the RAN makes up nearly 70% of the entire network CAPEX, any reduction in RAN outlay will lead to a wider footprint. Also, Open RAN has the potential to bring 25-30% saving in OPEX cost, directly impacting network creator’s bottom line.

A crucial component in an Open RAN architecture is the cloud-based RAN Intelligent Controller (RIC), which is responsible for managing 5G network functions such as network slicing, and prioritised communications. The RIC is virtualised, so inherently scalable, but also offers enormous potential for operators to develop new applications to optimise their networks, build new services, as well as control multiple vendors in a rural Open RAN. The snag, however, is that the challenging radio environment of a dense urban deployment adds considerable complexity to network management, making the more distributed rural Open RAN environment a much better testbed for developing, testing and piloting new services.

Another key factor is the maintenance overhead, which is traditionally a considerable challenge in the rural network environment. The Open RAN use of virtualisation and built-in ability to update the network edge remotely makes even more sense in a geographically dispersed deployment.

Governments a key driver for Open RAN success

Government intervention in the Open RAN space has increased over time. The UK’s Future RAN content (FRANC) allocated up to £30 million of government funding to encourage new 5G market entrants. The UK government has separately committed £250 million of investment to ‘support and accelerate’ the development of ‘open and interoperable RAN technology’. .

Across the Atlantic, the US FCC’s $1.89 billion ‘rip-and-replace’ program has also actively suggested that applicants use Open RAN equipment in their replacement architectures. How much weight these financial incentives will prove to have is still to be established, but they are certain to spur interest in the overall Open RAN market, for urban and rural deployments alike.

Connecting the dots – Rural rollout intensifies

There is certainly plenty of real-world evidence of rural Open RAN rollout across the globe. In the UK, Vodafone has blazed a trail, committing to an initial tranche of 2,500 sites in the UK, mainly in rural locations across the South West of England and most of Wales. Vodafone is also working to launch Open RAN in other countries within both Europe and Africa, in a targeted effort to bridge the digital divide.

In Latin America, the Telefónica‑baked joint venture Internet para Todos (IpT) aims to connect 100 million people, reaching 2.1 million people by May 2021, mainly in Peru. Open RAN is a key component of the project, and a new Open RAN pilot proposed by Telefónica Colombia has also recently been approved. The latter is operating under Colombia’s Regulatory Sandbox initiative, which fast-tracks innovative ideas around national connectivity to allow operators to prove real world effectiveness in a short timeframe – a model that might well generate interesting results.

Meanwhile in Nigeria, Hotspot Network is connecting 2,000 villages with an Open RAN network, initially 2/3/4G, but upgradeable to 5G in due course. The strategy will enable fast network deployment at the minimum TCO, yet allow migration to 5G and beyond, according to the company, in locations where low ARPU (average revenue per user) has historically been a barrier to new network rollouts.

Challenge and opportunity lie ahead

While many challenges remain for Open RAN – not least wider standardisation and field-proven deployments at scale – it is clear that Open RAN can help bring technology faster to Rural areas looking at expected cost saving for operators towards CAPEX/OPEX. That said, the value of rural 5G pilots and trials of new low-latency and high bandwidth services is an undeniable benefit too.

Overall the Open RAN theme is one of flexibility and innovation, rather than the more rigid end-to-end traditional approach. Government support is certainly in line with this direction of travel too, raising a very positive picture for the road ahead – Open RAN is clearly on the rise.

Prior to being appointed Managing Director, Ankit was the CEO of STL’s Connectivity Solutions Business, which he helped expand to over 100 countries and oversaw multiple strategic acquisitions and joint ventures in Italy, Brazil and China. He led STL’s launch of first-in-the-world solutions and formulated strategic partnerships with operators globally. Ankit holds a Bachelor’s degree from University of Southern California and an MBA degree from London Business School.