Profiting from vRAN: vendor strategies for adapting to new MNO buying patterns

Virtualisation and disaggregation of the radio access network (RAN) will allow operators to reduce their costs per site significantly while also opening up the supply chain, which presents a threat to established RAN vendors. The increasing use of services (often triggered by 5G virtualised RAN (vRAN) migration) will provide vendors with opportunities for revenue growth, but they must adapt to a market that is fragmented in terms of products and operator buying patterns.

To support vendors in identifying the best strategies for achieving revenue growth, this report defines four main operator procurement profiles, and analyses the best ways for vendors to target each profile. The profiles are based on a unique and in-depth survey of 82 established and new mobile network operators (MNOs) conducted by Analysys Mason in 4Q 2019, which investigated budget, timing and deployment strategies for vRAN.

In this report, we answer the following questions.

• What will the rate of migration be from physical to virtualised RAN?
• How much existing RAN revenue will be transferred to the vRAN market, and will it be captured by the same, or new, vendors?
• What are the elements within the vRAN that will provide growth opportunities for vendors, and how much will these be worth by 2025?
• What short-term and longer-term tactics can vendors adopt to mitigate the pressure on RAN unit prices and to respond to rising competition?
• Which elements of the vRAN will be most available to vendors, and which will be designed and deployed by operators or open groups?

vRAN can increase vendor revenue, but the market will be highly fragmented in product and procurement terms