Considering the price of spectrum, it's no wonder that operators are turning to every tool in their arsenal to squeeze the most out of their networks. If that means small cells, distributed antenna systems (DAS), Wi-Fi and more, so be it.
In some cases, that also means turning to C-RAN, which can mean either Cloud-RAN (radio access network) or Centralized RAN. Advocates say C-RAN can offer various benefits to operators as they densify their networks, including savings on cap ex, op ex and energy consumption. The power savings primarily comes from having only one remote radio head at the cell site. Examples of vendor solutions include Ericsson's (NASDAQ: ERIC) Radio Dot, Huawei's LampSite, SpiderCloud's E-RAN and Commscope/Airvana's OneCell.
Last year, Verizon (NYSE: VZ) became the first to deploy Ericsson's Dot system in a commercial building in the United States. Installed in Verizon's regional headquarters in Southfield, Mich., the Dot was used to support Verizon's Advanced Calling service, including HD Voice and Video Calling over LTE, in indoor environments.
Wells Fargo Securities analysts note that in San Francisco, Verizon has negotiated the right to place small cells on 400 light and utility poles, and it is housing the baseband units in remote hub locations, which are connected to the poles with dark fiber. That type of C-RAN configuration allows it to minimize how much equipment gets put on the poles, which was kind of a requirement from the planning department.
According to Tim Howard, research analyst at SNS Research, large outdoor deployments are gaining pace in the U.S. Besides Verizon's deployment in San Francisco, Sprint is investing in C-RAN architecture networking gear as part of its Next Generation Network densification plan.
"U.S. operators are also expanding their fiber footprint to cost-efficiently deploy fronthaul for C-RAN deployments," Howard said. Verizon recently signed an agreement to buy XO Communications fiber-network business for $1.8 billion, a deal in which it gains access to 4,000 additional on-net buildings in 40 major markets and 1.2 million fiber miles.
On the flip side, T-Mobile US (NYSE:TMUS) doesn't own a vast wireline network like Verizon and AT&T (NYSE: T) do, and according to Signals Research Group (SRG), it's in the other corner when it comes to C-RAN. T-Mobile declined to comment to FierceWirelessTech for this article. But according to SRG, based on comments during the Avren Events' RAN USA in late January, T-Mobile doesn't think there's a business case for C-RAN due to the fronthaul requirements, a poor Common Public Radio Interface (CPRI) interface and the tremendous amount of processing power that means it can't run on a common silicon platform.
Fiber explains why Asian operators have been much faster to jump on the C-RAN bandwagon. Japan and South Korea, areas rich in dark fiber, continue to spearhead commercial C-RAN investments, but SNS Research sees interest growing in other parts of the world, including with operators such as China Mobile, Orange, Verizon and Sprint.
China Mobile is perhaps the strongest advocate for C-RAN these days, particularly leading in the operator community when it comes to researching C-RAN and its potential for LTE and next-generation network topologies that follow, according to SRG. China Mobile claims to have achieved energy op ex savings of up to 70 percent in initial C-RAN trials.
As for the impact of C-RAN on tower companies, it's not entirely clear. On one hand, wireless operators will not need as much ground space at the cell site to house baseband units; on the other hand, tower companies should see more leases for remote radio head attachment as the networks are built out, said Wells Fargo analyst Jennifer Fritzsche in a research note. But she and her team expect the best positioned tower company to capitalize on the trend is Crown Castle, given its Sunesys acquisition and rights to more dense metro fiber. When asked about the impact of C-RAN during a quarterly conference call last year, Crown Castle CEO Ben Moreland said: "It looks to us like over time, we could see less equipment on the ground potentially, but not less in the air."
One wholesale provider that's gaining momentum in the small cell backhaul space is Zayo. As of the end of 2015, Zayo had a total of 2,224 small cells on its network. The service provider told investors during its second quarter 2016 earnings call that it plans to dedicate about $75 million in capital to build out 1,000 new sites.
The evolving nature of C-RAN
C-RAN is expected to play a role in 5G as well. However, since terms like C-RAN can mean different things to different camps, it's worth considering the terminology. Stakeholders may disagree over specifics but generally agree on the broad strokes.
In conventional radio access networks (RANs), radio and baseband processing functionality is integrated inside a base station. Centralized RAN or C-RAN decouples base station functions into distributed remote radio heads (RRHs) at the cell site and centralized baseband units (BBUs). RRHs connect to BBUs via a fronthaul network, Howard said.
"The way we define C-RAN is centralized RAN where the baseband processing unit can enable multiple radios to attach to that baseband processing unit," so you might have cell site communicating back to a central baseband, "and we do that today," said Glenn Laxdal, Ericsson's CTO and head of strategy for North America.
It can be a very good substitute for DAS because it can be more economical and deliver added bandwidth, but it can also be expensive relative to Wi-Fi, he said, adding that there are still environments, like tunnels, where DAS works well and would be the preferred solution.
SRG says there are at least two definitions to consider in C-RAN. The most basic approach is to centralize or pool the baseband functionality of a cellular base station within the network and then connect the baseband functionality via fiber with the distant radio elements, which are located at the cell site, according to SRG.
The more advanced approach to doing C-RAN is to virtualize the centralized baseband functionality such that the baseband functionality can be pooled and then distributed throughout the network as it is needed. With this approach, it is also more than likely that the baseband functionality runs on a common hardware platform with customized software running on top, which provides the specialized functionality, the researchers say.
Is it turning into V-RAN?
Some have suggested that C-RAN is morphing into V-RAN. According to Howard, V-RAN is a variation of C-RAN where the baseband functionality is virtualized in the form of software functions hosted on general purpose IT hardware. Aggregating these resources in centralized data centers makes it possible to pool baseband capacity over cloud computing platforms. In this case, the virtualized RAN solution is actually termed Cloud RAN.
Either way, vendors continue to invest. At Mobile World Congress (MWC) 2016, Samsung Electronics announced an enhanced C-RAN platform with the introduction of C-RAN 2.0+. Retaining the benefits from Samsung's Smart SON and Smart Scheduler, the base stations will detect the interference at the cell edge and control radio transmission power in real time while maximizing the total data throughput by 40-50 percent on average. Samsung says its evolution of C-RAN will be an important asset for operators preparing for 5G.
Also at MWC 2016, Nokia launched a new radio access generation, including cloud-based RAN designed for open interfaces. The cloud RAN uses Nokia's AirFrame IT hardware that it says meets strict radio access capacity, security and latency requirements. Nokia also says its baseband units can be chained to create virtually unlimited capacity and connectivity to meet the needs of massive Internet of Things (IoT) connectivity and 5G speeds.
Wells Fargo Securities analysts see C-RAN as a trend that is in the very early innings. SNS Research estimates that global investments on C-RAN architecture networks will reach more than $7 billion by the end of 2016, with investments in RRHs, BBUs and fronthaul transport networking gear. Even if not all operators are on board, C-RAN is likely to play a role in future networks.