Can Europe Catch Up in Open RAN?

Deutsche Telekom, Orange, Telecom Italia (TIM), Telefónica and Vodafone want policymakers to make Open Radio Access Networks a strategic priority, arguing that (as has been argued for decades about other areas of innovation) Europe is “falling behind” the United States and Japan in developing O-RAN. 

At stake, the telcos say, are global vendor revenues in the Open RAN value chain, with 38 percent of total revenue, followed by RAN hardware (24 percent), Cloud (18 percent), Semiconductors (11 percent) and RAN software (nine percent)

For infrastructure supplies, the global market is said to be worth EUR36.1 billion by about 2026. That includes Open RAN hardware and software (EUR13.2 billion) and revenue from the broader RAN platform as well. 

And that might be a large part of the problem. The ecosystem spans so many other areas where European suppliers are not leaders that “catching up” in a short time seems highly unlikely. 

Source: Analysys Mason 

And though legitimate questions can be asked about how soon Open RAN becomes a substantial commercial reality, it is hard to argue with the argument that--eventually--it will do so, as part of the broader move to cloud-native and virtualized telecom networks. 

“Open RAN is coming regardless of what Europe decides,” says the white paper. 

The study identified 13 major Open RAN players in Europe compared to 57 major Non-European players. However, many European players are at an early stage of development and have not yet secured commercial Open RAN contracts, while vendors from other regions are moving ahead in actual sales.

“European vendors are not even present in all Open RAN sub-categories (e.g. Cloud Hardware), and are outnumbered in almost all categories by Non-European players (e.g. 2 major European vs 9 major Non-European players in the semiconductor category),” the paper says.

That “Europe is falling behind” argument has been made for a couple to four decades, whether it is levels of research and development spending, digital technology, economic growth or innovation in general.   

source: CB Insights 

Probably few--if any--observers would be optimistic about changing Open RAN supplier capabilities in a short period of time, if it could be done at all.