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The use of intelligence in the RAN is not new—both 4G and 5G deployments rely heavily on automation and intelligence to replace manual tasks, automate the RAN, manage increasing complexity, enhance performance, and control costs. What is new, however, is the rapid proliferation of AI and generative AI, along with a shifting mindset toward leveraging AI in cellular networks. More importantly, the scope of AI’s role in the RAN is expanding, with operators now looking beyond efficiency gains and performance improvements, cautiously exploring whether AI could also unlock new revenue streams. In this blog, we will review the scope and progress.

AI RAN Vision

Considering the opportunities with AI RAN, its evolving scope, the proliferation of groups working on AI RAN, the challenges of measuring its gains, and the absence of unified frameworks in 3GPP, it’s not surprising that marketing departments have some flexibility in how they interpret and present the concept of AI RAN.

Still, some common ground exists even with multiple industry bodies (3GPP, AI-RAN Alliance, ETSI, NGMN, O-RAN Alliance, TIP, TM Forum, etc) and key ecosystem participants working to identify the most promising AI RAN opportunities. At a high level, AI RAN is more about efficiency gains than new revenue streams. There is strong consensus that AI RAN can improve the user experience, enhance performance, reduce power consumption, and play a critical role in the broader automation journey. Unsurprisingly, however, there is greater skepticism about AI’s ability to reverse the flat revenue trajectory that has defined operators throughout the 4G and 5G cycles.

The 3GPP AI/ML activities and roadmap are mostly aligned with the broader efficiency aspects of the AI RAN vision, primarily focused on automation, management data analytics (MDA), SON/MDT, and over-the-air (OTA) related work (CSI, beam management, mobility, and positioning).

The O-RAN Alliance builds on its existing thinking and aims to leverage AI/ML to create a fully intelligent, open, and interoperable RAN architecture that enhances network efficiency, performance, and automation. This includes embedding AI/ML capabilities directly into the O-RAN architecture, particularly within the RIC/SMO, and using AI/ML for a variety of network management and control tasks.

Current AI/ML activities align well with the AI-RAN Alliance’s vision to elevate the RAN’s potential with more automation, improved efficiencies, and new monetization opportunities. The AI-RAN Alliance envisions three key development areas: 1) AI and RAN – improving asset utilization by using a common shared infrastructure for both RAN and AI workloads, 2) AI on RAN – enabling AI applications on the RAN, 3) AI for RAN – optimizing and enhancing RAN performance. Or from an operator standpoint, AI offers the potential to boost revenue or reduce capex and opex.

TIP is actively integrating AI/ML into its Open RAN vision, focusing on automating and optimizing the RAN using AI/ML-powered rApps to manage and orchestrate various aspects of the network, including deployment, optimization, and healing.

While operators generally don’t consider AI the end destination, they believe more openness, virtualization, and intelligence will play essential roles in the broader RAN automation journey.

What is AI RAN

AI RAN integrates AI and machine learning across various aspects of the RAN domain. For the broader AI RAN vision, the boundaries between infrastructure and services are not clearly defined, and interpretations vary. The underlying infrastructure (location, hardware, software, interface support, tenancy) varies depending on multiple factors, such as the latency and capacity requirements for a particular use case, the value-add of AI, the state of existing hardware, power budget, and cost.

AI-RAN, aka the AI-RAN Alliance version of AI RAN, is a subset of the broader AI RAN opportunity, reflecting AI RAN implementations utilizing accelerated computing and fully software-defined/AI-native principles. AI-RAN enables the deployment of RAN and AI workloads on a shared, distributed, and accelerated cloud infrastructure. It capitalizes on the demand for AI inferencing and converts the RAN infrastructure from a single-purpose to multi-purpose cloud infrastructure (NVIDIA AI-RAN Paper, March 2025).

While the ideal reference solution is AI-native/Cloud-native, AI RAN can be offered until that vision is achieved. The majority of the AI RAN deployments to date are implemented using existing hardware.

Why integrate AI and RAN

With power and capex budget requirements rising on the RAN priority list, one of the fundamental questions now is where AI can add value to the RAN without breaking the power budget or growing capex. It is a valid question. After all, RAN cell sites have been around for 40+ years, and the operators have had some time to fine-tune the algorithms to improve performance and optimize resources. AI can make sense in the RAN, but given preliminary efficiency gains, it will not be helpful everywhere.

Topline growth expectations are muted at this juncture. However, operators are optimistic that integrating AI and RAN will produce a number of benefits:

Reduce opex/capex
Improve performance and experience
Boost network quality
Lower energy consumption

AI can help introduce efficiencies that help to lower ongoing costs to deploy and manage the RAN network. According to Ericsson, Intelligent RAN automation can help reduce operator opex by 60%. AI will play an important role here, accelerating the automation transition, simplifying complexity and curbing opex growth. Most of the greenfield networks are clearly moving toward new architectures that are more automation-conducive. Rakuten Mobile operates 350 K+ cells with an operational headcount of around 250 people, and the operator claims an 80% reduction in deployment time through automation. China Mobile reported a 30% reduction in MTTR using Huawei’s AI-based O&M. Nokia has seen up to 80% efficiency gain in live networks utilizing machine learning in RAN operations.

The RAN automation journey will likely take longer with the existing networks. The average brownfield operator today falls somewhere between L2 (partial autonomous network) and L3 (conditional autonomous network), with some way to go before reaching L4 (high autonomous network) and L5 (full autonomous network). Even so, China Mobile recently reported it remains on track to activate its L4 autonomous networking on a broader scale in 2025. Vodafone is exploring how AI can help to automate multi-vendor RAN deployments, while Telefonica is implementing AI-powered optimization and automation in its RAN network. According to the TM Forum, 61% of the telcos are targeting L3 autonomy over the next five years.

AI can help improve the RAN performance by optimizing various RAN functions, such as channel estimation, resource allocation, and beamforming, though the upside will vary. Recent activity shows that the operators can realize gains in the order of 10 to 30% when using AI-powered features, often with existing hardware. For example, Bell Canada, using Ericsson’s AI-native link adaptation, increased spectral efficiency by up to 10 percent, improving capacity and reliability of connections, and up to 20 percent higher downlink throughput.

Initial findings from Smartfren’s (Indonesia) commercial deployment of ZTE’s AI-based computing resulted in a 15% improvement in user experience. There could be more upside as well. DeepSig, demonstrated at MWC Barcelona, its AI-native air interface, OmniPHY, running on the NVIDIA AI Aerial platform, could achieve up to 70% throughput gains in some scenarios.

With the RAN accounting for around 70% of the energy consumption at the cell site and comprising around 1% to 2% of global electricity consumption (ITU), the intensification of climate change, taken together with the current power site trajectory, forms the basis for the increased focus on energy efficiency and CO2 reduction. Preliminary findings suggest that AI-powered RAN can play a pivotal role in curbing emissions, cutting energy consumption by 15% to 30%. As an example, Vodafone UK and Ericsson recently showed on trial site across London that the daily 5G radio power consumption can be reduced by up to a third using AI-powered solutions. Verizon shared field data indicating a 15% cost savings with Samsung’s AI-powered energy savings manager (AI-ESM), Similarly, Zain estimates that the AI-powered energy-saving feature provided by Huawei can reduce power consumption by about 20%, while Tele2 believes that smarter AI-based mobile networks can reduce energy consumption in the long term by as much as 30% to 40%, while simultaneously optimizing capacity.

AI RAN Outlook

Operators are not revising their topline growth or mobile data traffic projections upward as a result of AI growing in and around the RAN. Disappointing 4G/5G returns and the failure to reverse the flattish carrier revenue trajectory is helping to explain the increased focus on what can be controlled — AI RAN is currently all about improving the performance/efficiency and reducing opex.

Since the typical gains demonstrated so far are in the 10% to 30% range for specific features, the AI RAN business case will hinge crucially on the cost and power envelope—the risk appetite for growing capex/opex is limited.

The AI-RAN business case using new hardware is difficult to justify for single-purpose tenancy. However, if the operators can use the resources for both RAN and non-RAN workloads and/or the accelerated computing cost comes down (NVIDIA recently announced ARC-Compact, an AI-RAN solution designed for D-RAN), the TAM could expand. For now, the AI service provider vision, where carriers sell unused capacity at scale, remains somewhat far-fetched, and as a result, multi-purpose tenancy is expected to account for a small share of the broader AI RAN market over the near term.

In short, improving something already done by 10% to 30% is not overly exciting. However, suppose AI embedded in the radio signal processing can realize more significant gains or help unlock new revenue opportunities by improving site utilization and providing telcos with an opportunity to sell unused RAN capacity. In that case, there are reasons to be excited. But since the latter is a lower-likelihood play, the base case expectation is that AI RAN will produce tangible value-add, and the excitement level is moderate — or as the Swedes would say, it is lagom.

Charter’s proposed $34.5 billion acquisition of Cox Communications reflects just how much the US broadband landscape has changed. The near-nationwide availability of fixed wireless access (FWA), combined with expanding fiber footprints, has put cable operators on the defensive as they struggle with net broadband subscriber losses. Back in September 2024, I detailed the situation in a blog titled, “US Telcos Betting on Convergence and Scale to End Cable’s Broadband Reign”:

Going forward, the 1-2 punch of FWA and fiber will allow the largest telcos to have substantially larger broadband footprints than their cable competitors. Combine that with growing ISP relationships with open access providers and these telcos can expand their footprint and potential customer base further. And by expanding further, we don’t just mean total number of homes passed, but also businesses, enterprises, MDUs (multi-dwelling units), and data centers. Fiber footprint is as much about total route miles as it is about total passings. And those total route miles are, once again, increasing in value, after a prolonged slump.

For cable operators to successfully respond, consolidation likely has to be back on the table. The name of the game in the US right now is how to expand the addressable market of subscribers or risk being limited to existing geographic serving areas. Beyond that, continuing to focus on the aggressive bundling of converged services, which certainly has paid dividends in the form of new mobile subscribers.

Beyond that, being able to get to market quickly in new serving areas will be critical. In this time of frenzied buildouts and expansions, the importance of the first mover advantage can not be overstated.

So, maybe the specific combination of Charter and Cox was a surprise. But the notion that cable operators had to fight back by getting bigger was certainly not.

Network Upgrade Plans Likely to Stay the Same

Of course, there is no guarantee that this transaction will ultimately be approved. So, while the trade and legal reviews are getting underway, both operators still face competitors that are likely to accelerate their own marketing and sales initiatives designed to attract subscribers from the latest “corporate behemoth,” which only wants to stamp out competition and raise your broadband and mobile service prices. Charter and Cox, even though they have slightly different access network upgrade plans, will continue along their individual paths to raise speeds and improve signal quality across their HFC plant.

Fortunately, for both operators, the long-term vision of their access networks remains nearly aligned, though the timing might be slightly different. It’s worth a quick look at how Charter and Cox are both similar and different when it comes to their broadband access network strategies:

Charter and Cox are moving forward with Distributed Access Architectures (DAA) using vCMTS and Remote PHY Devices. Charter is in the early stages of their RPD deployments, while Cox has converted nearly all of its existing optical node base to Remote PHY. Cox had historically relied on Cisco for its M-CMTS (Modular CMTS) platforms, an early precursor to Remote PHY, and subsequently took the next evolutionary step of homing RPDs to the existing CCAP installed base. While that did allow the operator to move to Ethernet transport between the headend and RPDs, the benefits of moving to a vCMTS architecture weren’t fully realized, which is why Cox is now working with Vecima’s vCMTS platform.
Both Charter and Cox believe in using the Extended Spectrum flavor of DOCSIS 4.0, though Charter expects to deploy DOCSIS 4.0 earlier than Cox. This is because Cox is already running the vast majority of its network at 1 GHz with a mid-split architecture, while Charter is in the process of upgrading its usable spectrum from 750 MHz to 1.2 GHz (using 1.8 GHz amplifiers running at 1.2 GHz) using a high-split architecture. According to Charter CEO Chris Winfrey, “In terms of the network, Cox is largely through an upgrade for what we would call a mid-split upgrade…There’s no rush for us to go try to harmonize that into a high split footprint.” Winfrey also said, “In our planning, the eventual conversion to DOCSIS 4.0 with DAA doesn’t take place for years and it’ll be done at a lower cost as a result of them having already completed their mid-split and because of the scale that we’ll have at the time that we’re completing our own DOCSIS 4.0 and DAA upgrades.” In other words, Cox has a longer runway with its current mid-split, 1 GHz architecture delivering 2 Gbps downstream speeds. So, should the merger go through, the Cox systems would be delivering similar downstream speeds as the upgraded Charter systems, but would likely have reduced upstream capacity relative to the upgraded, high-split systems.
Charter is also a proponent of GAP (Generic Access Platform) nodes and has begun deploying these modular nodes in its network to replace aging and discontinued units. Cox, on the other hand, has made no mention of GAP nodes and likely doesn’t need to in the short-term, given that it spent a good deal of capex years ago to upgrade to 1 GHz. Even Charter isn’t deploying GAP nodes universally across its network, as it will continue to source GAP and non-GAP nodes from multiple vendors.
When it comes to vCMTS, Charter has hinted about having cores from multiple vendors, though to date it has only publicly announced Harmonic as its vCMTS supplier. Meanwhile, Cox just recently announced its selection of Vecima’s Entra vCMTS, which makes sense given the deployment of Vecima RPDs. But Vecima RPDs are also being deployed at Charter. So, does that mean that Vecima stands to win a share of Charter’s vCMTS business, as well? Although RPD and vCMTS interoperability is expected and is in deployment at other operators, Charter has made note of some interoperability challenges within its network. Thus, it utilizes Falcon V as a testbed for vCMTS and RPD interoperability, along with Vecima’s acquisition of Falcon V.
When it comes to fiber deployments, Charter and Cox have different technology choices. Charter continues to use 10 Gbps DPoE (DOCSIS Provisioning over EPON) for both its RDOF-funded projects and its Greenfield fiber builds. In contrast, Cox was an early adopter of both GPON and the newer XGS-PON technology. As a result, Cox has a significantly higher percentage of PON (Passive Optical Network) connections compared to Charter in terms of total homes and businesses served.

It goes without saying that there are many variables from a technology perspective surrounding this proposed transaction that are likely to have profound implications on the cable outside plant and headend vendor landscape. The combination of two of the largest cable operators in the world ultimately reduces the number of opportunities for unique vendors, thereby furthering consolidation among those vendors. Should this deal move forward, I fully expect there to be some consolidation among equipment vendors as they look to grow their share at the new combined company.

Recent shifts in U.S. trade policy, including the implementation and adjustment of tariffs, have introduced uncertainty into global markets. Temporary rollbacks and exceptions—such as reduced rates and product-specific carve-outs—have added to the complexity, particularly in response to market reactions.

As of now, the effective average tariff rate on U.S. imports is estimated at 27%, the highest level since the early 20th century, reflecting broader efforts to recalibrate trade dynamics. Accordingly, a key question from clients remains: how will changing tariff policies affect broadband deployments and the demand for related equipment?

Given the frequent adjustments to trade policy—including recent exemptions for smartphones, consumer electronics, and certain GPUs—it remains challenging to forecast the full extent of the impact on broadband infrastructure in the near term.

What follows are our best estimates as to the impact tariffs will have this year and beyond on the broadband market:

1. In the US, tariffs will have minimal impact on most fiber broadband equipment pricing and deployments.

Key fiber broadband equipment providers in the U.S. have already moved most of their assembly and manufacturing to the U.S. in order to adhere to the BABA (Build America, Buy America) waiver of the NTIA’s BEAD (Broadband Equity, Access, and Deployment) program. Though not all of the products being deployed in broadband access networks have been onshored, the most commonly deployed components—PON OLTs, ONTs, cabinets, and fiber-optic cable—have already been self-certified by the respective vendors and have already seen substantial increases in domestic manufacturing.

Beyond BABA, some major operators have multi-year purchase agreements in place for fiber-optic cabling and connectors that should protect them from any impact of tariffs on the import of silica and other raw materials used in the manufacture of fiber cables. For example, in 2024, AT&T signed a $1 billion multi-year agreement with Corning to ensure a stable supply of fiber cable and connectivity solutions. Originally intended to safeguard against supply shortages, this move now also serves to mitigate the risk of rising component costs.

2. Unlike FTTH, cable outside plant upgrades in support of DOCSIS 4.0 are likely to be impacted.

Commscope, which manufactures amplifiers and outer outside plant components in Mexico, and Teleste, which manufactures amplifiers in Finland, will both be impacted by tariffs at any level. We suspect that these manufacturers are either looking to relocate these facilities or manufacturing to the US or are seeking waivers in order to satisfy growing demand from Comcast, Charter, Cox, and others. The relocation of manufacturing is no trivial task and will introduce shipment delays beyond the inventory both already have in their warehouses. The time it takes to move manufacturing is a primary argument for the more gradual introduction of tariffs as opposed to introduction and implementation on the same day.

Additionally, Vecima Networks, which is delivering GAP (Generic Access Platform) nodes to U.S. operators, has already signaled that tariffs will also be materially significant at any level. The net result for cable operators pursuing DOCSIS 4.0 is additional deployment delays as well as increased equipment prices.

3. Residential Wi-Fi routers will feel an impact.

Just as Wi-Fi vendors are looking to ride the wave of Wi-Fi 7 penetration into more homes and businesses, tariffs at any level will easily increase the retail cost of even the most popular Wi-Fi brands by anywhere from 5 to 15%. China, Taiwan, and Vietnam are the manufacturing sources for the vast majority of these devices and, although these devices have been exempted from the tariffs as of Friday night, the likelihood of those full exemptions remaining is very slim, in our opinion.

4. Indirect impacts of tariffs and forecast adjustments.

The challenge for all industries now is that they simply cannot unsee what has already happened. The state of economic recovery in many countries and industries was already fragile after dealing with the supply shock of the COVID-19 pandemic, which introduced accelerated levels of inflation that were only exacerbated by government policies designed to stimulate economies. Those macroeconomic challenges were felt acutely in telecom equipment purchasing as service providers overbought capacity in 2022 and early 2023 and then had to focus on drawing down those inventories, putting pressure on their equipment vendors to sustain themselves during the spending slowdown. Just as these businesses are set to rebound and return to more normalized and consistent purchasing levels, tariffs are introduced, making the road to recovery cloudier.

In our January 2025 forecast, we had already reduced our expectations for North American broadband equipment spending from our July 2024 forecasts. These adjustments accounted for moderate tariff increase of 15-30% for imported electronics, semiconductors, and other components from China. However, the broader scope of tariffs, which now includes countries like Vietnam and India, exceeds our initial expectations.

However, the tariffs and their resulting costs passed on to end customers actually play only a small role in the forecast changes. The expectation that the BEAD program would come under review and delay the initiation of select fiber projects also played a role in our forecast reductions. Though we were expecting a very limited amount of BEAD funds to actually flow through to broadband equipment providers in 2025, we did expect to see some in the fourth quarter. Now, we highly doubt any money will be spent on OLTs or ONTs this year, instead pushing the spend well into 2026.

The bigger concern we had going into 2025 was the uncertainty among consumers and businesses alike about what impact the new administration’s policies would have on overall spending and investment patterns. After two years of steady inflation and higher interest rates, US consumer confidence was already trending downward. Consumer debt levels were rising and stubbornly high mortgage rates limited the number of new homes being purchased, as well as overall refinancing. With consumer spending in the US typically 68% of GDP, any further decline in confidence could result in consumers pulling back from spending.

And that is where the maelstrom around tariffs this past week has left consumers very concerned about what the immediate future holds for them. That uncertainty is likely to result in consumers either maintaining their current spend on broadband services or downgrading those services to save some money each month. The combination of consumers managing their communications budgets more tightly, fewer new home purchases, and less moves all means it will be incredibly difficult for broadband providers to continue to grow residential ARPU.

Lack of ARPU growth could result in some delays in planned upgrades from GPON to XGS-PON or from DOCSIS 3.1 to DOCSIS 4.0, for example. But it won’t stop the continued buildout of fiber networks in both greenfield and overbuild scenarios, because those are long-term investments with decades-long returns. Even if the cost to pass and connect homes increases due to tariff-induced price increases, the fiber strategies of major operators including AT&T, Frontier, Lumen, and others aren’t going to change.

Broadband and mobile bundling will undoubtedly accelerate this year as telco and cable operators try to lock in subscribers early with aggressive pricing and incentives on mobile services. Those moves will eat into ARPU growth, as well. But service providers will forgo some margins in the short-term in order to expand their subscriber base when the market volatility subsides.

Conditions improved in the second half, but overall, it was a challenging year for the telecom suppliers. Preliminary findings suggest that worldwide telecom equipment revenues across the six telecom programs tracked at Dell’Oro Group—Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch—declined 11% year-over-year (YoY) in 2024, recording the steepest annual decline in more than 20 years (decline was >20% in 2002), propelling total equipment revenue to fall by 14% over the past two years. This remarkable output deceleration was broad-based across the telecom segments and driven by multiple factors, including excess inventory, challenging macro environment, and difficult 5G comparisons.

In 4Q24, stabilization was driven by growth in North America and EMEA, which nearly offset constrained demand in Asia Pacific (including China).

The full-year decline was uneven across the six telecom programs. Optical Transport, SP Routers, and RAN saw double-digit contractions, collectively shrinking by 14% in 2024. Microwave Transport and MCN experienced a more moderate combined decline in the low single digits, while Broadband Access revenues were fairly stable.

Similarly, regional developments were mixed in 2024. While the slowdown was felt across the five regions — North America, EMEA, Asia Pacific, China, and CALA — the deceleration was more pronounced in the broader Asia Pacific region, reflecting challenging conditions in China and Asia Pacific outside of China.

Supplier rankings were mostly unchanged globally, while revenue shares shifted slightly as both Huawei and Ericsson positions improved. Overall market concentration was stable with the 8 suppliers comprising around ~80% of the worldwide market in 2024.

Rankings changed outside of China. Initial estimates suggest Huawei passed Nokia to become the #1 supplier, followed by Nokia and Ericsson. Huawei’s revenue share outside of China was up 2 to 3 percentage points in 2024, relative to 2021, while Ericsson is down roughly two percentage points over the same period/region.

Market conditions are expected to stabilize in 2025 on an aggregated basis, though it will still be a challenging year. The analyst team is collectively forecasting global telecom equipment revenues across the six programs to stay flat.

It was an intense week in Barcelona. After 50+ meetings during and before the event, below are some initial key takeaways.

RAN outlook remains tepid
Open RAN marketing is morphing
Vendor concentration will likely increase
Near-term AI RAN driven by cost efficiencies and performance improvements

Somber RAN Outlook

The RAN forecast remains unchanged, but downside risks persist. One of our primary objectives was to assess whether the 0% CAGR RAN forecast issued in January 2025 still holds. Our preliminary analysis indicates that our long-standing message remains valid—regional imbalances will continue to impact the RAN market in the near term, while the underlying fundamentals shaping the long-term trajectory will continue to exert pressure on the market.

Since RAN spending is constrained by capex, and capex is tied to operators’ revenue growth, the entire wireless industry is urgently seeking new revenue streams to break the cycle of increasing data consumption without corresponding increases in revenue. While we encountered numerous discussions and demos centered on charging premiums for guaranteed or enhanced performance, service providers recognize the difference between monetizing “fun” content and business-critical applications. For example, Uber may be willing to pay extra at airports to ensure timely pings for its users. However, expectations remain low for consumers to pay extra for faster video uploads from congested areas or an improved gaming experience. While AI may drive the development of new applications and content, it is unlikely to fundamentally change consumers’ willingness to pay for “fun” content.

With limited justification for revising carrier topline growth expectations, the focus remains on mobile data traffic growth and performance differentiation. Video accounts for approximately three-fourths of total mobile traffic but still represents a small fraction of the total time users spend streaming on cellular networks. As mobile data traffic growth slows, the industry is increasingly looking for a new device that could shift user behavior and, ultimately, increase video consumption. While a future dominated by smart glasses—where data is continuously recorded and uploaded—would present significant network challenges, we have to spread out the probabilities of any new device for the masses gaining traction.

The general sentiment from the event is clear: the slowdown in data traffic growth, combined with ongoing struggles to monetize consumer connectivity, remains a significant challenge. In this post-peak 5G rollout environment, even flat RAN projections are seen as an optimistic.

Open RAN Losing Marketing Steam

Open RAN is happening (>67% of Ericsson’s 2025 deliveries will be Open RAN prepared), but its marketing power is fading. Incumbent RAN suppliers prefer the Cloud RAN term, while the smaller suppliers are starting to look past Open RAN. Whether this is because the commonly used HHI (Herfindahl Hirshman Index) market concentration gauge was similar in 2024 as in 2018 when the O-RAN Alliance was formed, the original Open RAN multi-vendor vision is morphing, the entire RAN equipment market is down around $9 B, RAN outlook is flat, or the smaller suppliers are tired of waiting for larger Tier1 multi-vendor projects, the outcome is the same – the meaning of Open RAN is changing and marketing departments are aware (multiple suppliers are now looking to shift the message/focus).

In our 5-year forecasts, we track and show Open RAN, vRAN, Cloud-RAN, and multi-vendor RAN. However, our 10-year outlook consolidates the tracking/terms and only shows Cloud RAN.

Vendor Concentration Expected to Increase

Open RAN and Cloud RAN are unlikely to alter the long-term RAN concentration trajectory. After improving between 2020 and 2022—partly due to Open RAN adoption and market share shifts among the top five suppliers—the RAN HHI index rebounded in 2024. While we do not forecast HHI, historical trends suggest that market concentration is on the rise.

Although history is not always the best predictor of future outcomes, several factors indicate that a highly concentrated RAN market by 2030 is a strong possibility. These include recent RAN market developments, the scale required to sustain a competitive RAN portfolio, the ratio of greenfield to brownfield deployments (including FWA, enterprise 5G, and MBB), the challenges faced by smaller suppliers, and ongoing discussions about potential M&A activity.

AI RAN — Performance and Efficiency Gains in the Driver Seat

The use of intelligence in the RAN is not new—both 4G and 5G deployments rely heavily on automation and intelligence to replace manual tasks, manage increasing complexity, enhance performance, and control costs. What is new, however, is the rapid proliferation of AI in both consumer and enterprise domains, along with a shifting mindset toward leveraging AI in cellular networks. More importantly, the scope of AI’s role is expanding, with operators now looking beyond efficiency gains and performance improvements, cautiously exploring whether AI could also unlock new revenue streams.

Given the growing interest in AI RAN, it is no surprise that definitions and interpretations of AI vary across the industry. As the ecosystem gains a deeper understanding of AI’s value in RAN, definitions and expectations will likely continue to evolve.

Currently, the industry’s broader perspective aligns with the AI RAN vision outlined by the AI-RAN Alliance. At a high level, AI is expected to add value in three key areas: asset utilization, application growth, and RAN efficiency improvements. From an operator’s standpoint, AI offers the potential to either boost revenue or reduce capex and opex.

One of the observations in Barcelona was that near-term AI activity is primarily focused on cost savings and efficiency rather than topline growth. For example, China Mobile reported a 30% reduction in MTTR using AI-based O&M, Verizon shared field data indicating a 15% cost savings with Samsung’s AI-powered energy savings manager (AI-ESM), and an Ericsson AI-RAN demo at MWC demonstrated a 20% increase in throughput using AI to optimize performance in non-ideal radio conditions. Similarly, T-Mobile is evaluating how its collaboration with Nokia on AI-RAN can enhance network performance and efficiency.

With revenue growth stagnating, operators are exploring new revenue streams, showing interest in NVIDIA’s latest edge computing initiatives. However, they are also keenly aware of power, energy, and cost constraints at the cell site. The macro-RAN market, valued at approximately $30 billion, supports 1 to 2 million base stations annually, leaving little flexibility in DU pricing. For vRAN to compete with purpose-built RAN, server and acceleration costs must decrease rather than increase. While a GPU-driven RAN-only business model currently has limited viability, the potential for multi-purpose RAN supporting both RAN and non-RAN workloads presents a larger TAM.

That said, our overall impression is that the AI service provider (AI SP) vision—where carriers sell unused AI capacity at scale—remains somewhat farfetched for now. However, as costs and energy consumption decrease, the concept could have more potential in the future.

In short, it was another eventful show in Barcelona with a reasonable balance between hype and reality, perhaps because the RAN market is down nearly $9 B and the outlook remains tepid. Still, the event was also a reminder that there is a lot of innovation and activity underneath the flat topline trajectory. We did not cover all the MWC topics in this blog, but we will likely share more updates in the future.

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