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The global cloud and centralized radio access network (C-RAN) market was valued at $936.3 million in 2018 and is projected to reach $2,159.2 million by 2024, advancing at a CAGR of 15.9% during the forecast period (2019–2024). Rising focus on automation, increasing penetration of the 5G technology, growing digitalization and smartphone adoption, and surging demand for IoT solutions and services are expected to drive the market growth in the near future. Moreover, the market is expected to witness the fastest growth in Asia-Pacific (APAC). This can be mainly attributed to factors such as increasing investments in 5G, presence of a large consumer base, and rising number of SMEs, which are resulting in the adoption of cloud-based technologies and growth in the telecommunication industry in the region.
Factors Governing C-RAN Market
A key trend observed in the centralized RAN market is the increasing adoption of the technology among telecom operators on account of the increasing demand for LTE services. Traditional RAN technology is suitable for small offices, and its deployment in large areas, such as stadiums, malls, amusement parks, and event spaces, often results in increased network density, which affects the user experience. This favors the adoption of C-RAN in large public areas, as the software-based architecture facilitates increased storage capacity, enhanced user experience, and reduced inter-cell interference.
Penetration of the 5G technology is one of the key factors driving the growth of the cloud RAN market. To facilitate 5G network deployment, telecom operators are increasingly adapting to new technologies for desired network capabilities. The demand for 5G is growing rapidly in the business environment, and to meet this demand, service providers are focusing on the transformation of RAN. In 2018, telecom operators across the world invested more than $140 billion in the upgradation and expansion of the existing network. Also, the number of 5G subscribers was around 1.6 billion in 2018, which is expected to surpass 1.9 billion by the end of 2019.
Organizations are, therefore, increasingly adopting cloud computing for new and legacy systems. Moreover, with its adoption, the need for hardware installation and maintenance gets eliminated, resulting in low investment in terms of cost and resources. Besides, it allows individuals to work from multiple locations and devices on a single platform, which further helps streamline business processes.
C-RAN Market Segmentation Analysis
On the basis of deployment, the outdoor category held the larger share in the C-RAN market in 2018. This type of deployment offers better coverage in high-density network areas, such as malls, parking lots, and stadiums.
Based on component, the infrastructure category held the largest market share in 2018. This can be attributed to the increasing investments by mobile operators in 5G and other related technologies such as 4G and LTE. However, the C-RAN market is expected to demonstrate the fastest growth in the services category during the forecast period. This can be ascribed to the growing adoption of software-based C-RAN solutions, which is resulting in the high demand for related professional services.
On the basis of application, the C-RAN market, during the forecast period, is expected to exhibit the fastest growth in the targeted outdoor urban areas category. The category includes residential and commercial spaces, which generate a high demand for C-RAN for the transformation of network to LTE & 5G.
In terms of architecture, centralized RAN held the larger market share in 2018, due to the high preference of customers for software- and hardware-integrated solutions. Moreover, many business organizations are still not aware of virtualized RAN solutions.
The market is expected to witness the fastest growth in the APAC region during 2019–2024. The increasing number of smartphone users, rising consumption of data, and growth in subscriptions have resulted in increased demand for C-RAN. LTE has been the dominant technology in China, and telecom service providers are now focusing on the implementation of the 5G network technology.
Geographical Analysis of C-RAN Market
North America led the C-RAN market during the historical period. Increasing penetration of the 5G network technology is the major reason for the growth of the market in the region. In recent years, telecom operators in the region have launched services for both fixed and wireless mobile networks. This is also due to large investments in R&D by telecom operators for the deployment of the C-RAN technology across various countries of the region. Also, the regional market is expected to grow at a CAGR of 16.8% during 2019–2024.
During the forecast period, the C-RAN market is expected to witness the fastest growth in APAC. The demand for 5G and virtualization technologies is rising across various countries in the region for enhanced network coverage and customer experience. Moreover, factors such as the increasing number of smartphone users, rising data consumption, and growth in subscriptions are resulting in the need for C-RAN deployment. LTE has been the dominant technology in China, and the country is now focusing on the implementation of the 5G technology.
Competitive Landscape of C-RAN Market
The C-RAN market is consolidated in nature and characterized by the presence of several key players, including Verizon Communications Inc., Ericsson Inc., Fujitsu Limited, Huawei Technologies Co. Ltd., Cisco Systems Inc., Nokia Corporation, ZTE Corporation, NEC Corporation, Intel Corporation, and Samsung Electronics Co. Ltd.
Recent Strategic Developments of Major C-RAN Market Players
In recent years, major players in the global C-RAN market have taken several strategic measures to gain a competitive edge. For instance, in May 2019, SoftBank Corp. announced its partnership with Nokia Corporation to launch its 5G offering through the Nokia AirScale solution. Nokia’s 5G RAN would be deployed in Japan to provide 5G services to consumers and businesses. The offering would facilitate enhanced mobile broadband, machine-type communication, and low-latency communication services.
Besides, in February 2019, Ericsson Inc. joined the O-RAN Alliance, which is a group of several telecom service providers and suppliers. As a member, Ericsson would focus on open interworking between RAN, automation, and network orchestration. The company would also focus on upper-layer function to provide interoperable multivendor profiles for interfaces between centralized RAN functions, which would further accelerate 5G deployment, globally.
Key Questions Answered in the Report