January 19, 2023
Challenges and opportunities of open networks
Challenges and opportunities of open networks
Current state of Open RAN and the cost conundrum
The prospect of ‘open networks’ and Open Radio Access Networks (Open RAN), in particular, has fostered a significant debate over recent years among communication service providers (CSPs). Open RAN, its software, packet core networks, and the Operation Support System/Business Support System (OSS/BSS) management and orchestration that lies underneath provide an alternative to the dominant vendors in the RAN market.
Expanding ecosystem and vendor choice
The conversation around Open RAN became even more acute after many governments began restricting vendors from certain countries due to geopolitical concerns. These restrictions have provided some additional interest in Open RAN as telecoms operators are looking to expand the limited range of equipment vendors. This increased interest is coming not only from CSPs, but also from small and medium-sized suppliers who were previously unable to compete in the Telco infrastructure space due to the vendor lock-in in existing deployments and the nature of the competitive telco landscape.
CSPs have traditionally used proprietary, single-vendor networking solutions that are designed in a monolithic architecture, with new solutions and applications usually being integrated over time. However, as the pace of digital transformation and prospect of network disaggregation has increased, CSPs’ approach to the market is shifting away from expensive proprietary networks towards multi-vendor solutions, which offer greater control and flexibility, increasing supply chain diversity and accelerated innovation for products and services in a more competitive, best of breed market.
The challenge of open networks and carbon neutrality
The early promise of open networks centered around the ability of operators to reduce both capital and operating expenses through the combination of increased competition and the capability of squeezing greater efficiency through the Radio Intelligence Controller (RIC). However, while this remains a realistic potential in the longer term, it is only part of the story. A clearer picture needs to be painted if the true CAPEX and OPEX savings touted for Open RAN strategies are to be realized.
One of the most critical challenges for operators over the coming decades will be power consumption in the RAN, particularly as carbon neutrality goals are set to kick in between 2030 and 2040. Open RAN networks are being built to accommodate increasing volumes of network traffic.
In the preliminary stages of deployment, energy costs will likely increase slightly compared to traditional configurations. Fortunately, chip makers are now developing and designing chipsets specially designed for 5G physical layer performance while still retaining the programmability that Open RAN requires. Such developments will help optimize the power consumption of Open RAN equipment such as Centralized Units (CUs) and Distributed Units (DUs) as open networks mature.
The role of systems integration
The early phase of Open RAN deployment is also likely to see a short-term bump in system integration (SI) costs, mainly because of the high percentage of deployments that will occur in brownfield environments. Nevertheless, NEC expects SI costs to ultimately fall as a share of total network costs compared to current levels as standardized interfaces take hold and legacy components are swapped out.
A multi-vendor, unified network management architecture enabled by software-defined networking (SDN) simplifies operations and paves the way for 5G and beyond. CSPs can achieve CAPEX and OPEX efficiencies by combining management systems, thereby reducing the network Total Cost of Ownership (TCO).
Lab research by the O-RAN Alliance is being conducted by vendors, including NEC, to streamline and accelerate integration activities which should ultimately generate increasing cost savings over time. NEC estimates that the cost benefits to Open RAN deployment could range from 16%-19% based on a five-year TCO model compared to legacy RAN, growing to 23%-27% over a 10-year period.
Buy now, save later
While cost savings will be an increasingly significant rationale for building open networks, CSPs should be aware that some of those savings will not be immediately realized. Those cost savings will become more apparent as 5G traffic volumes grow and the open networks thrive with the expanded multi-vendor ecosystem. Clearly, early adopters will enjoy cost benefits first.
With more automated efficiencies through RIC and xApps deployment, energy savings, and a lower carbon footprint, operators and CSPs will be able to justify their investments in 5G and be ready to meet the carbon neutrality goals on time.