FOR IMMEDIATE RELEASE

MIAMI, Florida, and BROCKENHURST, England, October 21, 2013

The financial pressures on mobile operators will become so great by the end of the decade that they will need to tear apart their network economics, along with their network architectures, according to the latest research report from Maravedis-Rethink's RAN Service, entitled 'Tearing the Network Apart: The Economics of the New RAN to 2018'.

As MNOs face rising CAPEX bills to meet mobile data demand combined with falling ARPU, they are turning to radical new network designs. With Cloud-RAN, they will virtualize baseband processing functions for hundreds of sites on a server or base station hotel. Operators will slash costs by leaving only ultra-low cost equipment at the cell site, eventually driving the equipment cost down below $100 by 2020. This will become vital as they 'densify' their networks with huge numbers of smaller cells, even in the macro layer. 

The $100 cell site is on the horizon, but it will only be achieved with investment worth $3.45 billion over five years in new servers, LTE RAN equipment, and particularly in software.

Caroline Gabriel, Maravedis-Rethink's Research Director and author of the report, commented: "Cloud-RAN economics are very tempting, but they will only be realized by harnessing standards to ensure interoperability and reduce cost. That, in turn, will create a whole new ecosystem, and operators must resist any attempts by their suppliers to hijack standards for software-defined networking or cell site equipment. Otherwise, this fledgling architecture will remain confined to a few pioneers with the resources to build their own ecosystems, like China Mobile."

Even as attention shifts towards small cells, operators will nevertheless deploy almost 2.5m cloud-connected macro layer sites in the years from 2013 to 2018. These will increasingly interoperate with a separate layer of compact small cells.

Many of these macro sites will be equipped with extremely low cost antenna/radio units, creating a significant opportunity for vendors in the antenna and remote radio spaces. The report provides five-year forecasts of those opportunities and the new cell site equipment space.

Selected key findings:

• Pure C-RAN faces many barriers, such as over-reliance on fiber to link sites and basebands and immature standards, but most operators will inch towards C-RAN using hybrid models.
• Development of microwave fronthaul technologies will be critical to improve the C-RAN business model
• Distributed antenna technologies will have a new lease on life, supporting coverage extension for C-RAN sites. This sector will open up $1.3bn in new revenues for antenna providers.

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MARAVEDIS-RETHINK is a leading analyst firm focusing on wireless infrastructure strategies.  www.maravedis-bwa.com

For more information, contact:

Adlane Fellah,

Customer Engagement

Maravedis-Rethink

afellah@maravedis-bwa.com

Tel: +1 (305) 865 1006