The move to Cloud RAN (Radio Access Network), or increased network virtualization, is a long-term path to improve most aspects of LTE network efficiency. A recent poll of operators showed that opex savings are seen as the biggest benefit of network virtualization.
The original architecture for cellular networks was to have sites with most of the network’s intelligence at the bottom of the tower in the form of an integrated base station radio. This radio was connected via coaxial cable to antennas located at the top of the tower, which radiated the RF energy.
Around 2000, as 3G was introduced, the network architecture began to change with the introduction of the common public radio interface (CPRI) standard. CRPI allowed the base station to be split in two — a base band unit (BBU) located at the bottom of the tower and a remote radio head (RRH) co-located with the antenna at the top.
The elimination of signal degradation by going up the tower improved the efficiency of the system. Cloud RAN takes this separation one step further by moving the baseband processor away from the site and deeper into the core. This architecture will improve network performance through lower costs, greater coordination and more capacity, resulting in higher speeds and improved efficiency.
A network that is completely run in the cloud would have COTS (commercial off-the-shelf) equipment placed centrally in a big data center with simple digital-to-RF converters located at the edge. To accomplish this, you would need dedicated links with very low latency and very high capacity from every cell site to the central core.
Unfortunately, the high speeds and low latency links necessary for true Cloud RAN do not exist ubiquitously, even in countries with large amounts of available fiber connecting current cell sites. In addition, more technology advancements are necessary before general purpose microprocessors are efficient enough to replace some specific purpose chips.
As such, the industry is really at the beginning of a long-term transition to Cloud RAN that will likely occur in stages with greater levels of centralization and virtualization as time goes on.