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29 June 2020

Is O-RAN up to either of its incompatible tasks – open RAN and US 5G revival?

O-RAN continues to gather momentum, both as the main face of the broader movement for an open, multivendor RAN platform, and as the heart of a political push by the USA to reassert hi-tech leadership, especially in 5G, against China.

It is not yet clear whether O-RAN itself is up to either, or both, of these massive tasks, which taken together, would reshape the whole mobile industry landscape. Full success would see the main bastion of power for Ericsson, Huawei and Nokia, the RAN, opened up to a whole variety of vendors – some major challengers from other industries such as the data center, some start-ups; some providing pre-integrated solutions, some just one or two hardware or software elements in the disaggregated network.

In parallel, if the US administration succeeded in harnessing O-RAN for its geopolitical 5G ambitions, there would be a revival of the North American mobile networks industry, which virtually disappeared from the RAN with the demise of Nortel and the acquisitions of Lucent and Motorola’s mobile carrier business. The buzz is centered on US-based challenger vendors, but it is more likely that US success would rest on acquisitions by its giants in other areas of technology. These could snap up the start-ups and give them the scale and resources to support tier one carriers, or even buy one of the European leaders – Ericsson and Nokia both have their vulnerabilities in the current climate.

Last week saw a revival of reports that Cisco might invest in, or even acquire, Ericsson, though the track record of their former ‘strategic partnership’, which was announced with great fanfare but failed to deliver any visible results, does not inspire confidence. There does seem to be a politically-driven push for a large US company to acquire one of the European giants, though Microsoft could be just as likely a candidate as Cisco. Any serious attempt to help such a deal along with state funding might fall foul of European Union rules, but that shouldn’t be necessary anyway – the US giants’ valuations would allow them to make the deals on a market basis, if they see sufficient benefit. But the repeated comments by politicians about acquiring Ericsson or Nokia suggest that they know O-RAN and a group of small vendors will not be enough, on their own, to restore US leadership – they need a big fish.

The other possibility is that O-RAN does not prove up to the mighty burdens being placed on its young shoulders by those who want a more open ecosystem, or a less Chinese one (and if those two objectives were briefly conflated, when O-RAN was new, they are increasingly diverging now).

That outcome could take several forms. O-RAN could fail but be superseded by a future open architecture – as, perhaps, ONAP (Open Networking Automation Protocol), having pushed the industry towards open systems in the OSS layer, may eventually give way to something more modern and cloud-native. If current geopolitics persist, there may be a separate open RAN for each of the sides in the new cold war.

The whole open RAN project could fail, as it has before – with operators, in the end, failing to find the confidence to trust new, untried architectures and multiple vendors with their precious 5G migrations.

Open platforms could colonize the edges of the carrier networks – the campuses, enterprises, transport hubs and rural extensions, while leaving the primary wide area RANs untouched.

Or the specific O-RAN architecture could become the norm, but be dominated by the same few suppliers. This is clearly the outcome Nokia is looking for. It has been the most committed of the major vendors to O-RAN, providing seed code for key elements like the open fronthaul interface and the RAN Intelligent Controller (RIC). Last week, it unveiled its O-RAN portfolio. This is a clear gamble that if it moves quickly, it can take the lead in O-RAN, and indeed help it gain credibility and wide-scale adoption. At that stage, it will hope to have secured a significant competitive lead over its major rivals, while luring operators away from the tempting but potentially risky decision to adopt equipment from small new suppliers.

There will be a number of greenfield deployments to chase in the near future, including Dish Network in the USA and Drillisch in Germany, both of which have committed to O-RAN. It will be important for Nokia to do well in those deals, in order to cement its position as the vendor which offers both long track record in major radio and RAN integration projects, and an O-RAN portfolio. But Japan and South Korea are backing their horses, NEC and Samsung, to leverage O-RAN to gain 5G market share; and Airspan has shown that a dense small cell network can be deployed at scale for a major carrier; so even without the start-ups to consider, there is an evolving competitive landscape for Nokia.

Its ability to recover from its recent 5G radio missteps, the success or failure of its O-RAN gamble, and its future ownership, will all be critical in shaping the future of the fledgling open RAN business.