Cloud-RAN (Radio Access Network) Market Analysis, Segments, Growth and Value Chain 2014-2020

Cloud-RAN,orCentralized-RAN (C-RAN) is an advanced cellular network architecture for mobile network infrastructure that can support 2G, 3G and 4G system and meet wireless communication benchmarks. Cloud-RAN is outpacing traditional cellular network system as it doesn’t require RF (radio frequency) equipment, antenna, BTS (baseband unit) and digital processor to be deployed in the cell site. Traditional cellular network architecture demands more power, space, additional big cell towers and directional antennae to support new air interface technologies such as LTE (Long-Term Evolution) and multi-frequency bands. Moreover, enhancement of traditional cellular network in a wireless network to support data traffic demand becomes economically unsustainable. In contrast, Cloud-RAN enhances mobile communications and helps cellular network operators in delivering qualitative and effective mobile communication services at a reasonable cost.

Cloud-RAN ensures centralization of baseband processing in one location. To connect to RRH (remote radio heads), fibre optical cables are required.Cloud-RAN is based on new technologies,viz. cloud computing thatcan take advantage of advanced remote antennae or radio head techniques and SDN (software-defined network) approaches.

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Cloud-RAN offers various benefits like reduction in cost of network operations. The three types of cost reductions are energy consumption, site rental expenses and operational & maintenance cost of network. These savings can be balanced against cost incurred on fibre optical cables required to meet fronthaul capacity and latency requirements. Cloud-RAN also enhances capacity due to coordinated multipoint and ensures speedy performance. Aforementioned benefits of Cloud-RAN architecture automatically increase the value of service to end-users. However, initial high investment required to deploy Cloud-RAN architecture acts as one of the major challengesfor the growth of Cloud-RAN market.

The Cloud-RAN market can be categorizedinto component, services and geography.The market is segmented on the basis of thenatureof its components, which includes six major categories -BBU (Baseband Units), RRU (Remote Radio Units), optical transport network, servers, processors and measurement device. On the basis of services segment, the Cloud-RAN market can be categorized into network services, custom services and system integration services. The market can also be segmented on the basis of major geographies, into North America, Latin America, Western Europe, Asia-Pacific, Japan, Eastern Europe and Middle East & Africa.

Cloud-RAN is a global multi-billion dollar market which is expected to exhibit a considerable growth in CAGR, from 2014 to 2020. The key drivers include need to reduce increasing data traffic and Capex&Opexexpenditure, which are the biggest revenue generators for the Cloud-RANmarket. The key restraint to this market is high initial cost of deployment and dependency on availability of fibre. Major players in Cloud-RAN market focuses on partnerships, joint ventures, and acquisition &merger strategies in order to outperform their competitors. For instance, in 2013 Intel Corp. acquired Mindspeed Technologies and extended its offerings with new mobile system services i.e. Cloud-RAN.

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Some of the key players identified in the Cloud-RAN market are Ceragon Networks Ltd.,Actix Ltd., Aricent Technologies, JDSU, 6WIND, MTI Radiocomp, Altera Corp., Mindspeed Technologies, Inc., Intel Corporation, VitesseSemiconductor, Telco Systems, VPI Systems, Telco Systems and TEOCO among others.

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