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Berenberg hails Vodafone's move towards Open RAN technology

Mon 18 November 2019 11:17 | A A A

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(Sharecast News) - Analysts at Berenberg reiterated their 'buy' recommendation for shares of Vodafone following the company's announcement that it was studying a possible redesign of all its European cell sites based on so-called Open RAN technology which the analysts said could yield multiple benefits, including sharply reduced operating and capital expenditure costs.

Open radio access network technology allows mobile networks to be managed with software run on general purporse hardware, resulting in faster network deployment, increased site coverage and lower opex and capex.

According to the analysts, opex could be reduced by 30.0-35.0% and capex by at least 25.0%.

The announcement was made by Yago Tenerio, Vodafone's head of network strategy and architecture, during the previous week, at the Telecom Infra Project summit in London.

Nevertheless, Berenberg noted concerns among some in the industry that decoupling RAN would only be possible after the mid-2020s, as the software was considered to be lacking in maturity and astability.

"In particular, it was considered too risky to trial in cities where high customer demands on the network meant that a misstep in execution could endanger service quality and hence commercial momentum," the analysts said.

"This is the reason why the likes of Vodafone, Telefónica and Telecom Italia have so far been trialling the technology in emerging markets, in rural areas or in new builds."

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