This is how 5G is smashing network capex and opex requirements for MNOs

Communications Solutions   |    Jun 14, 2022    |    by Willem Wentzel

This is how 5G is smashing network capex and opex requirements for MNOs

Would you like to save 40% of your network budget?

By Willem Wentzel, Head of Wireless at NEC XON

5G Open RAN (ORAN) is a game changer because it significantly reduces capex and opex to build the network. Allied to a connectivity play in Africa, rather than a features play, has shaped a unique approach for mobile network operators (MNO) and service providers on the continent.

Deploying 5G using ORAN equipment reduces capex by as much as 40% and opex by as much as 30%, according to analysts and early commercial results from the Rakuten deployment in Japan.

This is a huge departure from how things used to be done. Rather than buying all the kit to build the network from a single vendor, and suffering the consequent lock-in, MNOs and service providers (SP) can now take the best-of-breed from the vendors they want. It opens up the design as well as the opportunities further along the roadmap.

The new integration possibilities enable sweating existing assets.

Integration and interoperability also mean MNOs and SPs can sweat their existing investments more and build them into the business model going forward. That means they can generate immediate new revenues while they support a phased migration over time.

5G is not going to see immediate and widespread rollout in Africa. It will certainly be deployed at scale, but it will take some time. However, accelerated ORAN interest is being supported by OEM and vendor resource investments through the O-RAN Alliance.

MNOs and SPs will use 5G to gradually grow network coverage, offer new services, and create new use cases.

They will grow network coverage by deploying 5G in small, select, population-dense urban areas then shift existing kit further from the network centre.

There were 650 million Africans living in rural areas in 2020. Yet, more than 40% of Africans lived in cities, according to The World Bank, Statista and others. Africa is also enormous. Countries like the US and regions such as Europe can fit into Africa many times over. So, on the one hand, you have cities that are densely populated, where people tend to be more affluent. On the other, you have people with sometimes significantly lower incomes living in exceptionally low density. The first group is a much more attractive market but the second will not be neglected, for several reasons.

The network can gradually expand for greater coverage, while developing a roadmap to transform to 5G, generating revenues that fund the transformation over time.

Africans in ultra-rural areas tend to have simpler communication and related services requirements. 2G is often adequate. The closer you get to cities and the denser the population becomes, the more people require better communications services and better bandwidth, as well as more concurrent connections.

No network achieves 100% geographical coverage. But, by deploying 5G at the centre of dense urban environments and shifting the current best generation equipment further out, networks improve coverage. That’s often a contractual goal linked to licences. But it also draws more customers into the network without the same expense as in the past.

5G’s high speed, high volume bandwidth, and high number of concurrent connections is highly suited to urban and industrial centres where it’s features and benefits can deliver the maximum returns. It’s much better to shift the older, less capable kit closer to the edge of the network, where it’s better transmission distance attributes can be put to greatest commercial effect.

However, tying together 2G, 3G, 4G and 5G into one integrated network requires a common backplane. And that’s where the integration magic of O-RAN really pays dividends and that’s why it’s making such a huge impact on African MNOs and SPs.

If you’re at a mobile operator or service provider talk to me. We can have a two- to four-hour discovery workshop. You can meet our local and global experts and together develop a picture of your journey to Open RAN.

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Wireless, 5G