How does Cloud RAN improve network efficiency?

Cloud RAN enhances network efficiency primarily through the ability to facilitate resource sharing and dynamic load balancing across multiple cells. In a Cloud RAN architecture, the baseband processing is centralized, enabling various radio units to share resources effectively. This centralization allows for better coordination and management of network resources, which means that capacity can be allocated flexibly based on current demand rather than being fixed to individual cells.

Dynamic load balancing ensures that traffic can be distributed according to real-time conditions, optimizing performance and reducing congestion in specific areas. By managing resources this way, Cloud RAN can respond to varying user demands, ensuring that the overall network operates more efficiently and effectively while also improving users' experiences with minimal service interruption.

The other options do not accurately capture how Cloud RAN works or the benefits it provides. For instance, reducing the number of users does not address efficiency in the same way resource sharing does, and increasing the distance between cell towers could actually lead to poorer network performance rather than efficiency. Providing fixed connections, while it may have its place, does not leverage the dynamic, flexible nature of Cloud RAN which is key to improving overall network efficiency.