The Rise of Massive MIMO and Open RAN in the 5G Era

5G is being rapidly deployed across different regions, particularly for enhanced Mobile Broadband (eMBB) use cases, where enabling technologies such as massive Multiple-Input and Multiple-Output (mMIMO) help Mobile Network Operators (MNOs) to realize the full potential of 5G. Recent research findings show that Asia-Pacific will lead the mMIMO market with penetration of more than 70% across a forecast period from 2020 to 2026. This trend is due to the rapid adoption of 5G in countries such as China and South Korea. China has been aggressively deploying 64T64R mMIMO, while South Korea is rapidly deploying 32T32R mMIMO mainly due to space and mast weight constraints. This trend is followed by Europe with 10% market penetration. In contrast, other regions such as North America, Latin America, and the Middle East & Africa illustrate lower participation towards the end of the forecast period.

In addition, as the industry moves towards an open, intelligent, and virtualized Radio Access Network (RAN), recent research indicates that the Open RAN mMIMO will have approximately 10% market penetration by 2026, mainly in Asia-Pacific followed by Europe and North America. This increase in the market penetration can be associated to the adoption of Open RAN technology for greenfield and brownfield operators across the aforementioned regions. By contrast, Latin America and the Middle East & Africa are expected to have less adoption of the technology potentially due to Huawei not being banned in these regions. Therefore, it is anticipated that traditional vendors will offer more affordable boundless to MNOs for 5G and mMIMO with a reduced integration time and deployment cost in order to keep their market position dominance.  

The rapid adoption of 5G in Asia-Pacific has also accelerated the economies of scale for mMIMO radios, enabling MNOs to fast-track the deployment of 5G. Then, what could the barriers be that MNOs would face in the adoption of mMIMO in regions such as North America, Latin America, and the Middle East & Africa?

The adoption of mMIMO is closely associated to the spectrum assets owned by the MNO. For low frequency bands, the wavelengths can make the size of the antenna impractical to deploy (taking into account existing regulation and limited space to access rooftops and deploy new mast sites) and offer inefficient performance. C-band, on the other hand, enables a better antenna size and a good trade-off between coverage and capacity compared to mmWave.

The availability of C-band and mmWave spectrum can speed the adoption of mMIMO in North America and Latin America as follows:

• In North America, the United States has the potential to experience an acceleration in the adoption of mMIMO once the C-band spectrum is auctioned by the Federal Communications Commission (FCC), which is expected in 4Q 2020.
• Latin America will have access to C-band and mmWave spectrum for 5G, which is expected to be auctioned between 2020 and 2022 across different countries. For example, Chile will auction 3.5 GHz and 26 GHz bands towards the end of 2020, and Colombia will auction 3.5 GHz bands between 2021 and 2022.

In contrast, in the Middle East & Africa, many leading economies such as Saudi Arabia, United Arab Emirates, and South Africa have already deployed 5G in the C-band. However, there are several emerging markets that do not have access to 5G spectrum and are potentially favoring the maturity of 4G networks. Clearly, as spectrum becomes available for 5G (in C-band and mmWave) many regions will have the potential to accelerate the deployment of mMIMO.

5G is changing the way in which traditional networks are deployed, mainly due to site densification required in order to increase network capacity along with enabling technologies such as mMIMO to realize the full potential of 5G, thereby demanding a change of strategy from vendors to meet the requirements of the market. mMIMO has the potential to drive the revenue of mobile infrastructure vendors where a compromise is to be made between large-scale deployments and revenue. Vendors can work towards ensuring a higher number of contacts with large network deployments of 5G and mMIMO. However, this does not necessarily mean that the profit is going to increase at the same scale because a lower price involves a reduction of cost as well as profit.

The industry has suggested that the cost of a mMIMO radio is on the order of US$5,000 in China; unarguably, this is mainly due to the economies of scale characteristic of the Chinese market. With this cost, MNOs have the potential to accelerate the deployment of 5G and adopt mMIMO technologies in dense and urban areas and even for other applications such as Fixed Wireless Access (FWA) with a lower up-front investment and a higher ROI.

Although this can work well for MNOs, mMIMO vendors will have the pressure to increase their margins. With large-scale deployments in the longer run, further price improvements will be expected with the increasing demand for mMIMO in markets such as North America and Latin America. Thus, vendors will need to heavily invest in R&D of the software, hardware, and System on Chip (SoC) of the mMIMO solution to enhance the production cost, allowing for better profitability of the technology.