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26 January 2021

Four European giants ramp up O-RAN pressure on NEPs and governments

The O-RAN platform, and its attempt to drive a multivendor ecosystem for virtualized networks, gained a significant credibility boost last week when four major Europe-based operator groups offered very public support in the shape of a memorandum of understanding (MoU). Signing up were Deutsche Telekom, Orange, Telefónica and Vodafone, which between them have 1.4bn customers (see lead article for analysis).

The four operators said in their joint statement: “The signatories individually commit that Open RAN will be the technology of choice for RAN… The signatories will collaborate to support Open RAN reaching competitive parity with traditional RAN solutions as soon as possible,” they said, agreeing to “prioritize” the implementation of Open RAN (without really defining that).

They said: “This initiative is an important milestone towards a diverse, reinvigorated supplier ecosystem and the availability of carrier-grade open RAN technology for a timely commercial deployment in Europe.” They promised to “work together with existing and new ecosystem partners, industry bodies like the O-RAN Alliance and the Telecom Infra Project (TIP), as well as European policy makers”.

They noted that they “do not intend to and will not”:

  • Define any Open RAN standards, which will be left to standards bodies such as O-RAN Alliance
  • Exclude any entity from participation in the development, implementation and promotion of Open RAN (presumably a reference to Huawei)
  • Coordinate on network deployment or any commercial procurement terms for Open RAN equipment (to avoid any implications of antitrust or cartel)

The group also promised to deliver a ‘Technical Priority Document’ within three months that will outline “a joint understanding of the priorities for Open RAN architecture and models, including non-commercial use cases, technical requirements, technologies, prioritized interfaces (non-proprietary), protocols and deployment scenarios.” That will be followed, in turn, by an ‘action plan’.

Of course, such documents are often mainly symbolic and do not always translate into firm deployment roadmaps and contracts. But this MoU reflects the determination of large operators to seize the steering wheel in 5G roll-outs, to improve their own economics, whether that is through piling new pressure on existing vendors, or encouraging new innovators and competition into the fold.

European governments have also been following the example of the USA in voicing support for an O-RAN vision in which their operators can roll out 5G more cost-effectively thanks to a competitive ecosystem, hence accelerating the socio-economic benefits; while also supporting local vendors and making it less painful to exclude Huawei from the supply chain. Some, such as Germany, have hinted at direct or indirect financial incentives for operators to deploy O-RAN equipment.

But the operators want something more concrete.

There was a thinly veiled pitch for government financial backing – operators that were protesting about the cost of excluding or removing Huawei from their networks last year are now seeking other ways to make their governments give them compensation for the cost and risk; and they also want more active support to build a European supplier ecosystem. The MNOs in this region have often benefited from their close ties to dominant local suppliers – Ericsson and Nokia of course, and in the past Alcatel and others. But the initial O-RAN ecosystem is springing up mainly in the USA, Japan, India, Korea and Taiwan rather than Europe.

The quartet said in their statement that the European Commission and national governments “have an important role to play to foster and develop the open RAN ecosystem by funding early deployments, research and development, open test lab facilities and incentivising supply chain diversity by lowering barriers to entry for small suppliers and start-ups who can avail of these labs to validate open and interoperable solutions”.

The MoU commits to:

  • Encourage a competitive European Open RAN ecosystem of technology providers and system integrators, thus strengthening the European RAN industry.
  • Promote to European policy makers and industry that adopting a competitive Open RAN ecosystem will place Europe and European industry at the front in the race of technological leadership.
  • Seek funding from European Governments; to support and develop the Open RAN ecosystem, early deployments, R&D activities and test labs, and European suppliers and start-ups.

The signatories agreed to provide, within six months of the MoU coming into force, a joint ‘European Ecosystem Document’ outlining proposals on how to facilitate a European Open RAN ecosystem and to act as the basis for funding at national and European levels.

One problem is that both political and operator commitments are often vague about what ‘open RAN’ will actually need to entail in order to qualify for special funds or places in government contracts; or to count towards operators’ deployment targets. Do they mean O-RAN Alliance specifications, or any open, multivendor RAN interface? Does an open RAN site refer just to open fronthaul between the radio unit and baseband, (and if so, would eCPRI count?) Or does it mean the whole O-RAN architecture including multiple RAN interfaces and the RAN Intelligent Controller (RIC)?

It is unlikely, and against the spirit of open platforms, that a whole architecture would be dictated, but if operators can choose only the open interfaces that suit their priorities, just ticking an O-RAN open fronthaul box would be sufficient to achieve their self-imposed targets – but would not necessarily further the cause of multivendor networks, except by making it easier to threaten incumbent suppliers with swap-out if they do not deliver attractive pricing and performance.

The MoU does suggest that even reluctant vendors will need to support some O-RAN interfaces and options, at least, if they are not to be excluded from many procurements – though the position of Huawei is uncertain. The Chinese vendor has not supported O-RAN, even in the significant number of China-based trials and plugfests, and of course, some governments are using O-RAN as a means to facilitate an anti-Huawei supply chain. But there will be plenty of operators in countries where Huawei is still welcome, which are also interested in O-RAN.

That interesting conundrum is not much discussed in the current stage, when much of the public debate (as opposed to the real world trials) is focused on the USA and Europe. The USA has been the most vocal government about O-RAN and building an America-first RAN industry, and it now has a strong proponent of open RAN, Jessica Rosenworcel, as its new FCC chair. But apart from greenfield MNO Dish, the USA’s operators are being relatively cautious about O-RAN, even though AT&T contributed some of the initial code as a result of its xRAN project. Verizon has voiced rather vague support, though its new vRAN deployment with Samsung may include O-RAN elements (see separate item); AT&T is working hard on various vRAN options, but does not expect to start virtualizing its RAN for at least two more years, giving it some time to assess the pros and cons of the O-RAN offerings.

That timelag will be essential for the O-RAN platforms to achieve sufficient resilience, robustness and real world trials to be trusted in a large-scale 5G or 4G build-out. Even when thumping the O-RAN drum for political purposes, Europe’s operators are careful to put multiyear deadlines on any pledges. Orange says it only wants to buy O-RAN compliant equipment in Europe from 2025, but has also said O-RAN will only match traditional RAN performance in 2024-2026. Vodafone and Telefónica have both pledged that certain percentages of new base stations will support O-RAN, but with mid-2020s deadlines and only vague definitions of what will qualify as ‘open’.

And it may still be a long way from mandating O-RAN interface support, to deploying multivendor disaggregated networks. It is hard to imagine achieving optimal performance in a demanding 5G macro network use case without heavy integration involvement from the radio supplier, which would automatically give that vendor the pole position in the chain.

And for many operators, multivendor integration will be too complex and will add to risk, cost and performance trade-offs. BT’s CTO, Howard Watson, sought to dampen UK politicians’ somewhat under-informed enthusiasm for open RAN when he testified before a parliamentary committee during last year’s debate over Huawei’s role in 5G networks. As well as pointing out the challenges of integrating with legacy equipment, he said: “It’s unlikely that all of us will start deploying equipment from four or five different vendors because the operational challenge of the person in the van maintaining that tends to limit you to a choice of two.”

Open RAN may be part of Germany’s huge stimulus package:

Just as the major operators – three of which offer mobile services in Germany – were calling for government support for open RAN, German media reported that the technology would receive a significant boost from the country’s massive economic stimulus programme.

Proposals for the plan were drawn up, in response to the Covid-19 pandemic, last June, and total €130bn. Within that, there will be backing for open RAN R&D and ecosystem development, according to documents seen by business newspaper Handelsblatt.

Within a large pot of money assigned to digital and mobile coverage projects in the plan, €2bn is assigned to “testing new network technologies” for “5G and, later on, 6G” and supporting “innovative companies as they develop and test new, software-controlled network technologies.” In addition, “the plan is to facilitate market entry for such innovative network technologies.”

According to Handelsblatt, that €2bn is now being targeted specifically at open RAN developments across multiple projects managed by various German government bodies.

The CTOs of the four operators offered public endorsements:

Claudia Nemat, CTO of Deutsche Telekom: “Deutsche Telekom is committed to its promotion, development and adoption to ensure the best network experience for our customers. To seize this opportunity, it is critical that we join forces with our leading European partners to foster a diverse, competitive and secure 4G/5G ecosystem based on open RAN solutions.”

Telefónica CTIO Enrique Blanco: “Open RAN is the natural evolution of radio access technologies and it will be key for 5G networks.”

Orange CTIO Michaël Trabbia: “Open RAN is the next major evolution of 5G RAN. Orange believes it is a strong opportunity for existing and emerging European actors to develop O-RAN based products and services, starting with indoor and rural areas.”

Johan Wibergh, Vodafone’s group CTO (and previously head of Ericsson’s networks business): “Open RAN has the power to stimulate European tech innovation using the expertise of the companies that develop it and the governments who support it. Opening up the market to new suppliers, with our ambition and government advocacy, will mean faster 5G deployment, cost-saving network efficiencies and world class services.”