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1 September 2020

O-RAN’s star is still rising, but its supporters need to address four key risks

The momentum and excitement around open RAN architectures in general, and O-RAN in particular, continue to mount up. Each week brings news of additional trials and product offerings and the prospects for a 5G platform that is built on interoperability between elements are looking strong.

However, there are serious question marks over whether O-RAN itself will be the enabler of this new open world. The initiative has gained significant profile and confidence from being identified, in the minds of many, as synonymous with open RAN. But this is not really the case. It is very possible that in 10 years time, the industry may have achieved an open, interoperable network, but O-RAN may be nowhere to be seen.

This is certainly not a foregone conclusion, and there is undoubtedly significant investment, and rapid development, going into the platform. However, we see four important risks too, most of them familiar from other attempts by the mobile industry to adopt more open, or even open source, technologies in various parts of the network. These will be fully analyzed in an upcoming report and forecast by Rethink Technology Research, focused on the potential scenarios for open RAN and O-RAN adoption, which will be published in September.

  • O-RAN may become overly dominated by one vendor. Already, Nokia has contributed the bulk of the code for the RAN Intelligent Controller and other key elements. That does not devalue the result, since Nokia’s rivals will be able to take advantage of its efforts, but it does point to an ecosystem in which the established suppliers have a headstart in technology and incumbency. Vodafone, Telefónica and others are keen to pressurize their major equipment vendors by introducing more price competition, but those vendors bring many other advantages when it comes to the capability to deploy a large-scale network. When these MNOs make promises to support O-RAN in nearly all their new cell sites, they may conceivably keep those pledges merely by insisting that Nokia, Samsung or Ericsson tick the O-RAN box and enable key interfaces, such as fronthaul.
  • Conversely, O-RAN must guard against too much dependence on the favors of a few large operators. It emerged last week that a key reason for the sad demise of software-defined networking (SDN) start-up Lumina Networks was slower than expected adoption of open platforms by major operators – likely to have included its own investors, AT&T and Verizon. The failure to translate enthusiastic support into early-stage, at-scale commercial contracts is a major risk for any new vendor or initiative, and if big telcos like AT&T are becoming more cautious about open platforms this could be a blow to other open initiatives such as ONAP (Open Network Automation Protocol).
  • O-RAN, like any grouping of large companies with competing agendas, risks a slowdown in its progress as its members pursue varying objectives and try to address the increasingly complex demands of the market. Last week saw the Open Networking Foundation (ONF) launching its SD-RAN project, which could steal much of O-RAN’s thunder. The ONF was explicit that one reason for its action was that operators were complaining of slow progress at O-RAN, and of the process being hijacked by vendors. The ONF, like other bodies developing open RAN interfaces – such as the Small Cell Forum’s nFAPI (network functional API) – has longer and deeper experience of such projects than O-RAN. In the end, the smart operators may prioritize their resources for groups like Telecom Infra Project (TIP), and indeed SCF, whose activities are heavily focused on practical deployment and integration roadmaps, with the flexibility to support different standards and specifications.
  • A fourth risk is that the political factors that have helped boost O-RAN’s profile and support, especially in the USA, may backfire. We would not expect a softening of attitudes towards Huawei in the near future, even if the US government changes after November’s election, but many emerging markets, where operators are looking for cost-effective platforms, are not heavily influenced by US policy and may favor a more China-centric ecosystem (and Huawei and ZTE can certainly compete on price with any open architecture). Even in the USA itself, some politicians are sceptical of how quickly a new architecture can be adopted, and some are focused on more pragmatic Huawei replacement options based on established vendors, such as ION (Integrated and Open Networks).

For more information about our upcoming report and forecast on scenarios for open RAN and O-RAN adoption, which will be published in September, please contact John Constant on [email protected].