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6 December 2021

India seeks to break de facto Nordic duopoly through Open RAN

Huawei’s exclusion from many countries’ 5G plans – under pressure from the USA amid its trade and political wars with China – has caused many operators to pursue alternatives based on Open RAN to avoid being locked into a de facto Nordic duopoly of Ericsson and Nokia.

Samsung and NEC are gearing up to fill the breach but will take time to amass a comprehensive end-to-end portfolio across the whole RAN and core. The hope is that Open RAN – which is supported in certain products by both Asian challengers – will usher in a wider range of alternative suppliers, bringing greater choice, innovation and price competitiveness, and the ability to mix and match suppliers within one network.

Concern over the quasi duopoly is particularly acute in India, where telco services are highly price-sensitive, with historically rock-bottom ARPUs, and where 5G deployment has yet to begin. There are even suggestions that India might seek to develop some of its own 6G technology (see following item), though that may not enjoy support from operators, whose interests lie in containing costs rather than promoting the indigenous telco industry.

The pressures on the telcos’ finances have motivated all three – Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) – to engage in discussions with alternative telecom vendors and system integrators to overcome a potential future Nordic duopoly, if Indian authorities decide to place even more restrictions on Chinese equipment than they have in the past.

Vodafone Idea has now joined Jio and Airtel in pursuing this line more actively, according to an unnamed executive quoted in the Economic Times of India. This comes as little surprise, since Vodafone Idea has already committed to Open RAN for future 5G networks, after conducting over its existing 4G infrastructure, involving software from Mavenir.

Its two rivals, meanwhile, have been building their own 5G stacks to loosen dependence on the big two equipment suppliers, which does not mean they are using India’s indigenous 5Gi technology, but does mean incorporating open standards designed to allow greater freedom of procurement in future.

The involvement of the Chinese duo, Huawei and ZTE, is also unclear. While India left them out of its 5G trials in May 2021 the government did not rule out their future participation. The telcos would like them to be involved because of their price competitiveness, but are coming round to the realization that may not be possible. They also accept that Ericsson and Nokia will still play a major role, but want to be in a stronger negotiating position over price by having other credible participants across the whole ecosystem.

Open RAN is seen as essential for achieving increased choice and competition. But the problem is that the Open RAN movement evolved without taking account of legacy 2G, which – almost more than 3G – will continue to serve users in many countries, including India, for many more years yet. 4G subscriptions are growing rapidly in India, soaring from 638m in 2020 to a predicted 782m by the end of 2021, according to the latest report on 4G survival from our analysis arm RAN Research. The report forecasts that there will be  further substantial gains for 4G in India until it reaches a peak of 1.226bn users as late as 2027.

However, there are still over 300m reliant on 2G technology. Unless Open RAN can be modified to accommodate 2G, operators face having to run two parallel networks, which would blow out of the water any savings achieved through greater choice.

For that reason, the fate of India’s 5G roll-out remains unclear and dependent on developments elsewhere, as well as internally.

For more information about Rethink’s new report about the survival of 4G and legacy networks, please contact John Constant on [email protected]