LightTrends Newsletter

It’s the end of the (RAN) world as we know it, and I (open vRAN) feel fine

June 2021

LightCounting releases its Virtual and Open Radio Access Network Report Update.

The last 2 years a relentless U.S.-led effort to convince dozens of nations including allies to ban Chinese vendors from their 5G rollouts have changed the world in a dramatic fashion:

  1. The Chinese vendors are effectively either banned or avoided; and in Europe in particular, they are being replaced by Ericsson as the first supplier, complemented by Nokia as the second one. Had open RAN been ready for prime time, the cut into traditional RAN would have been bigger.
  2. The international cooperation aimed at forming various initiatives focused on open RAN and 6G to effectively compete against China is unprecedented, but also leading to fragmentation.
  3. These 2 developments along with TIP, the O-RAN Alliance and the Open RAN Policy Coalition drove the creation of a comprehensive open RAN ecosystem composed of more than 50 vendors.
  4. 5G rollouts which are occurring faster than previous 4G rollouts are closing the open RAN window of opportunity during this first phase, which in turn evokes the Stigler survivorship principle.

“In this mushrooming open RAN ecosystem, not every player will survive, and consolidation is inevitable, so is open RAN poised to rule the world and ruin the RAN establishment; we expect the global switch to open vRAN to occur in the 2024-2025 timeframe, driven by large Tier 1 CSPs in the U.S. and Europe.” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

Consequently, we expect the share of 2G/3G/4G open RAN to remain significant for some time to come and as 95% of commercial open RAN networks are running RAN functions on software, open vRAN is predominant. We forecast the open vRAN market to easily pass the $0.5B bar by yearend 2021, and our long-term forecast points to total sales of a few billion dollars by 2026 with the market growing at a solid double digit CAGR and accounting for 8% of total RAN. Note that had the geopolitical developments not been that significant, the penetration would have been higher because 5G rollouts would also have been more gradually distributed.

Finally, we believe open vRAN is a serious contender for indoor DAS replacement because it offers the same benefits as DAS has been known for, but with greater flexibility and cost efficiencies. Open vRAN penetration in the indoor DAS segment will also lead to the enterprise private wireless network space that is currently dominated by traditional RAN implementations.

About the report:

This report takes a deep dive into the virtualization and disaggregation of radio access networks and analyzes the various schools of thoughts ranging from basic virtualization of RAN functions (vRAN) to new open architectures such as open RAN, following the TIP initiative and the O-RAN Alliance specifications, designed to cut the dependency on proprietary RAN equipment supplied by the traditional vendors. The vRAN segment is taken from our existing RAN size and forecasts and broken down by 2G/3G/4G versus 5G, as well as by vCU/vDU and RU for each region, and also looks at the potential for indoor DAS replacement. The report covers a wide emerging ecosystem of vendors.

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