In the early phase of a new network roll-out, operators have to decide whether to be cautious or bold about the pace of migration, knowing that the right balance will dictate the commercial success of the first stage.
This report examines the economics of three main approaches to 5G network migration: overlay; modernisation and replacement. The publisher has assessed these technically in other reports, but this study focuses on the financial risks and rewards for mobile network operators (MNOs) of the different approaches and timescales for 5G deployment.
The report does not suggest that one approach is superior to another, but analyses how an operator must choose the solution that best aligns with its own strategy. For instance, the choice of migration path will be different for an operator that is focused mainly on cost containment within conventional business models, compared to an operator that has aggressive revenue growth targets. Attitudes to risk, availability of spectrum, levels of demand for new 5G services and many other factors are relevant in the choice of migration strategy.
It is based on several sources:
- interviews with MNOs and a survey of 84 MNOs, conducted in the last quarter of 2020
- capex data and forecast and cloud infrastructure forecast
- several models of different RAN architecture and timelines, with associated cost bases, built around composite case studies
The report answers the following questions.
- What are the three main approaches to 5G network implementation that are being adopted and how do these vary by region and operator profile?
- What are the real cost comparisons for a 10-year cycle?
- How should RAN migration strategies be best aligned to an operator’s business model priorities?
- For each of three main approaches, what are the most important economic risks and rewards for operators?
- How can operators balance different approaches to achieve the best business outcome, related to their individual KPIs?
Who Should Read this Report
- Senior decision makers and business strategists responsible for RAN within established mobile network vendors.
- Financial and strategy divisions within MNOs.
- Senior decision makers and business strategists within RAN and core vendors, including NEPs and new entrants.
- Senior network executives or CTO office within operators considering a migration to 5G within 5 years.
- Industrial alliances that focus on RAN such as O-RAN Alliance.
Three main options for 5G RAN migration and examples of operators that are pursuing them
- Executive summary
- Research overview
- Overlays are cost-effective but operators must avoid dead ends
- Operators that have invested in physical assets can balance cost-efficiency and future-proofing
- 5G standalone and vRAN migration need to be aligned with one another
- About the author