Summary Bullets:
• Open RAN and virtual RAN (vRAN) ecosystems will continue to develop incrementally in 2021 without dramatic change.
• New RAN activity will heat up in India, aided by national self-reliance goals and Open RAN trends.
A global pandemic and its associated lockdowns, quarantines, and economic impacts made the world glad to say goodbye to 2020, despite the fact that the same forces will continue to shape 2021. In turn, as we try to predict what 2021 will be like in the mobile access networks industry, we can find some indicators in the events of 2020.
Here are our three best guesses for the mobile access networks space in 2021:
Open RAN/vRAN Tease Continues: With hype regarding Open RAN and vRAN humming steadily throughout the last two years, the market is eager for the picture surrounding these topics to become clearer and for big moves and critical mass to render verdicts. Unfortunately, 2021 will probably only present us with more of the same: slowly building momentum. Although the landscape of Open RAN radio unit vendors swelled rapidly in 2020, there aren’t likely to be enough selections and deployments in 2021 to induce a shakeout separating leaders from losers in that arena. After all, one of Open RAN’s biggest champions in the operator community, Vodafone, has only committed to 1,150 Open RAN sites by 2023, suggesting that 2021 won’t be a defining year for the technology. And as for virtual RAN, although silicon investment and ecosystem development are increasing in this area, the pace of acceleration will be modest in 2021. For example, Qualcomm executives endorsing and committing to the technology acknowledged recently that vRAN won’t be able to compete with traditional architectures from a performance and power efficiency perspective for years. So for the most part, the year ahead for Open RAN and vRAN will feel a lot like the year we just ended.
Nokia’s Microwave Backhaul Business in Question: As part of the strategic reorientation now underway, Nokia’s newest CEO, Pekka Lundmark, has vowed to examine the company’s various portfolios and consider exiting businesses where Nokia doesn’t have, or can’t achieve, technological leadership. Because the company is trading an emphasis on “end-to-end” solutions for a vision of networks composed of best-of-breed parts, Nokia’s leadership has warned that product divisions won’t be able to justify their continued existence merely by being part of an end-to-end offering. If the company is truly committed to this approach, it will likely take a closer look at its microwave backhaul business, not because of any real technological deficiency but simply because the appeal of the microwave backhaul market to Nokia has probably been based in no small part on that end-to-end strategy. It’s not a high-growth market, and it’s a fairly competitive space, making it tough for participants to succeed.
Nokia’s distinguishing routing assets have long given it a technological edge in the space, so the company may conclude that this business is worth retaining. But until the company communicates certainty on this topic one way or another, operators may be leery about making significant investments with Nokia microwave platforms, and that in itself could pose problems for the company in 2021 – in addition to the vendor’s existing expectations of an unprofitable year for the mobile access business. The sooner Nokia can say something definitive on this front, the better.
Indian RAN Activity Heats Up: Several developments in 2020 suggest that commercial RAN development in India will accelerate in 2021. The country’s largest mobile operator, Reliance Jio, has trumpeted plans to develop its own 5G RAN gear in the spirit of Prime Minister Narendra Modi’s vision for a more self-reliant nation. In 2021, India-based system integrator Sterlite Technologies Ltd (STL) will begin offering a 5G indoor small cell, broadening its enterprise RAN play further following the company’s 2020 partnership with, and strategic investment in, enterprise RAN pure-play ASOCS. And Indian chipmaker Saankhya Labs will begin offering Open RAN radio units. In the near term, this activity will be largely limited to India, but before 2021 is over, we may have a clearer view of how likely it is for India’s RAN creations to impact the broader global market in the longer term.