The third-generation partnership project (3GPP) has identified different new functional split points, defined as options 1–7, between the baseband unit (BBU) and the remote unit (RU) for the 5G centralized radio access networks (C-RANs). The functional splits facilitate lower fronthaul line rate and latency requirements while imposing technical complexity and cost-efficiency trade-offs. Among all the functional split options, the standardization groups such as 3GPP, Open RAN (O-RAN), and small cell forum have selected option-7 as the most suitable choice for the 5G C-RAN deployment that can meet the operator’s requirements. One of the biggest challenges for designing option-7 functional split-based C-RAN is the capacity and latency requirement fulfillment as specified by 3GPP, while minimizing the deployment cost. In this regard, we propose an optimization model for cost-effective and energy-efficient option-7 functional split-based C-RAN architecture using wavelength division multiplexed passive optical network (WDM-PON) in the fronthaul. For the given locations of the next-generation core (NGC) and the set of RUs, the proposed optimization model explores the most suitable locations for the placement of BBU pools and arrayed waveguide gratings (AWGs). It provides complete interconnection details among NGC, BBU pools, AWGs, and RUs. It also provides the optimal number of digital units in each selected BBU pool, the splitting ratio of each AWG, and maximum fronthaul reach, satisfying the fronthaul latency, capacity, and power budget constraints. To the best of our knowledge, for the first time, we estimate the worst-case queuing delay for the upstream traffic flow using the G/G/1 queuing model and investigate its impact on fronthaul latency and deployment cost for different RU configurations. We compare the performance of the proposed option-7 functional split-based C-RAN with the traditionally used option-8 functional split-based C-RAN in terms of the deployment cost and fronthaul latency improvement.
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