Subdued 5G activity leaves Open RAN in limbo

The analyst firm said they fell 30% year-on-year, primarily due to muted activity in the US and Japanese 5G markets, and the commercial readiness or otherwise of the O-RAN uplink performance improvement (ULPI) specification.

The current malaise in the broader RAN market has been well documented. Dell'Oro last month reported that revenues fell between 10% and 20% year-on-year in the first nine months, and that Q3 was the sixth consecutive quarter of decline.

There are some signs of new life, with Ericsson CEO Börje Ekholm claiming in October that North America is stabilising and on the road back to growth. Nokia, isn't faring quite so well though. T-Mobile US recently denied a rumour it is planning to ditch Nokia in favour of Ericsson, but it didn't do a very convincing job of it.

As for ULPI, it was conceived of last year by the O-RAN Alliance as a means of addressing the shortcomings of fronthaul performance in Open RAN massive MIMO networks.

Sister publication Light Reading took a close look at the nuts and bolts of it last July, but in a nutshell, operators need ULPI if they want to reap the benefits of deploying Open RAN massive MIMO in high-traffic areas, and it's not quite ready for prime time yet. Indeed, in an Open RAN progress report dated 11 November, Ericsson said it plans to begin adding ULPI support to its massive MIMO radios from next year.

"The long-term trajectory is positive, but the short-term picture remains blurry," said Stefan Pongratz, VP of RAN market research at Dell'Oro, in a research note. "With large-scale greenfield deployments now mostly in the past, the broader market sentiment will remain uncertain until 5G activity in the US/Japan improves or modernisation projects utilising the latest O-RAN ULPI interfaces firm up."

Dell'Oro expects Open RAN to account for a mid-single-digit share of RAN market revenue this year, rising to 8%-10% in 2025.

Dell'Oro's gloomy report follows in the wake of another one issued by Mobile Experts in September.

Like Dell'Oro, it notes that the major build-out phase of greenfield Open RAN deployments is more or less over, and will be followed by a transition to upgrading legacy networks. As a result, Mobile Experts predicts that full-year Open RAN revenues will slump 83% in 2024.

Open RAN's time is coming, but not quickly enough for vendors like Airspan, which filed for bankruptcy back in April.

And even when Open RAN does go mainstream, Dell'Oro noted back in August that most operators are choosing to work with a single vendor on their Open RAN deployment. Multi-vendor deployments are expected to account for less than 10% of the global RAN market by 2028, begging the question: is Open RAN just a waste of everyone's time?