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22 June 2021

Despite Open RAN, Vodafone’s 5G core vendor strategy stays conventional

Vodafone’s credentials as a champion of Open RAN were enhanced earlier this month when it announced a line-up of non-traditional vendors for its network build-out in the UK (see separate item). However, just a week later, it announced another UK supplier contract, for dual-mode 4G/5G core, and this went to a far more familiar face, Ericsson.

Vodafone Germany is already working with Ericsson to deploy a cloud-based dual-mode core that can support 5G Standalone while working alongside the existing 4G core. Now the same platform will be adopted in the UK, and presumably other European markets, as the operator moves towards 5G Standalone.

The UK deployment will take five years to complete, and Ericsson’s president for Europe and Latin America, Arun Bansal, took the opportunity to remind us that, despite the fuss over Vodafone’s Open RAN, its primary 5G RAN supplier is Ericsson. “As key partners in Vodafone’s digital journey, we have deployed 5G across Europe after years of joint innovation. Now, expanding on our existing RAN, our core network portfolio has been entrusted to bring 5G to the next level in Germany and the UK,” he said in a statement.

The core win does indeed increase Ericsson’s position within Vodafone. In the 4G core, Vodafone was a heavy user of Cisco systems, but it has now opted for the same supplier for much of its core and RAN – most of the operator’s 5G RAN so far has come from Ericsson, following the ban on Huawei 5G equipment in the UK. Even if Vodafone extends Open RAN, and the new vendors, into its main 5G macro network over time, reducing Ericsson’s share, the Swedish vendor will have established itself in the most important element of the 5G network in terms of value to the operator model, the sliceable core.

Vodafone is first targeting 5G SA deployments first at areas with high traffic, such as cities, transport hubs, ports and industrial zones, and also to support private 5G networks.

Ericsson is also the main 5G SA vendor to UK incumbent BT, and it is one of the 5G core vendors (with Nokia) for O2 UK, though the fourth MNO, Three UK, is a Nokia core customer.

Ericsson CEO Börje Ekholm highlighted the 5G core opportunity on a quarterly results call in January, saying: “Our cloud-native 5G core portfolio has a very high win ratio and will start to generate revenues in the next 12-18 months.”