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O-RAN market set to rise along with 5G private networks
Benson Wu, DIGITIMES Research, Taipei 0

The 5G private network architecture outlined in 3GPP Release 16 allows businesses to deploy private networks by themselves, which will not only bring changes to the previous model that relies on telecom operators in the 4G era but also the rise of Open RAN (O-RAN) market, according to Digitimes Research.

The emphasis on the security of industrial data in the vertical application market also indicates that the independent operation model of 5G private networks might become a mainstream option for businesses, Digitimes Research believes.

Meanwhile, Chinese enterprises' interest in building their 5G private networks in cooperation with telecom operators is much higher than those in other mainstream markets, according to GSMA data.

A GSMA survey has found that about 46% of Chinese firms are likely to approach telecom operators for help to establish 5G private networks. However, firms in the US, Japan, Europe, and other countries are more interested in cooperation with verticalized heavyweights such as Siemens and Bosch, or telecom equipment providers such as Ericsson and Samsung Electronics.

The tendency of Chinese firms might be because that Chinese telecom operators, the locomotive of its national economy, have more resources or influence to activate the deployments of 5G networks than those in other markets.

Additionally, concerns about the risks of having their sensitive data leak through third parties also undermine the interest of enterprises in different countries to utilize designated networks set up by telecom operators.

However, given the benefits of private networks that will help facilitate industrial transformation or economic growth, spectrum supervision agencies in many countries have released part of their 5G spectrums for enterprises to set up private networks.

The O-RAN architecture, which utilizes open source software and standardized commercial equipment, can help reduce network construction costs. Therefore, governments around the globe have continued to release spectrum resources that enable the development of O-RAN networks.

According to GSA data, among the 263 5G private networks that had become operational as of January 2021, 60% of them are identical to LAN (local area network) networks, and 25% are operating as WAN (wide area network) networks.

The figures indicate that while the network coverage of LAN networks is minor in scale, the needs of base stations and connected terminal devices of current private networks are relatively limited, thereby reducing network deployment and management complexity, which is instrumental to the adoption of O-RAN solutions.

However, Digitimes Research believes that the support of O-RAN networks by large-scale telecom operators such as Vodafone, AT&T, and China Mobile, will be crucial to further expanding the O-RAN market.

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