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7 September 2021

Storm clouds for Open RAN, but operators are becoming creative anyway

It’s been an eventful summer for the fledgling Open RAN industry. As is to be expected with any new platform and associated ecosystem, there are uncertainties, sudden changes in the market, over-expectation combined with exciting breakthroughs. All this is made worse, in this case, by the fact that Open RAN has been hijacked as part of the geopolitical ‘5G race’ between the USA and China, and the attempt by several countries to build a homegrown 5G industry while sidelining Chinese technology.

The political angle is rarely entirely missing from development of critical infrastructure – there were plenty of international politics at work behind the original definitions of GSM, for instance, and the later emergence of US-influenced CDMA. But Open RAN has emerged partly as a result of politics – the operators’ wish for a wider choice of suppliers suddenly made urgent by government restrictions on Huawei.

The issues have been thrown into stark relief by Nokia’s suspension of its work with the O-RAN Alliance, as a result of the USA placing three Chinese companies, which have contributed to O-RAN work, on its ‘entity list’. That requires US companies to have a special licence (which is hard to get) to do business with listed firms, most famously including Huawei. Although Nokia, being Finnish, is not subject to US Department of Commerce (DoC) rules, the situation could also create risks for its very important US operator customers.

The most surprising thing about this news is that many observers seem so surprised by it. Chinese companies, particularly China Mobile and its ecosystem, contributed foundational technology to O-RAN and many early O-RAN trials and developments have been in China. A more thoughtful approach by the DoC might have foreseen the complications for the US operators, and steered clear of including these three rather obscure firms on the entity list – or perhaps there is thought involved, and this was designed to provoke action by the O-RAN community to exclude Chinese intellectual property.

The result is likely to be an acceleration of the trend for China and its allies to develop a separate platform, for Open RAN and for 5G in general, and for the world to split once more into two technology islands, with consequences for all mobile stakeholders’ access to massive scale of markets and to global innovation.

Meanwhile, these political events make it harder for vendors and operators to carry on with the difficult job of making an immature, if interesting, platform into something that is sufficiently robust to support demanding network behaviors and a multitude of business models. Some of the challenges may not involve governments of superpowers, but are important for the operators nonetheless. A key example is the shortage of alternative Open RAN vendors that can fully support operators’ 3G and 2G networks, an issue the UK MNOs, in particular, have highlighted, with Vodafone joining the debate last week.

Many companies are working away in the background to make the Open RAN platform real, deployable and commercial. There is a growing number of trials and deployments that demonstrate the need for a more open, plug-and-play architecture that can address roll-outs for which telcos have struggled to find a profit model – rural extension and enterprise/industrial scenarios, for instance, where an open network can reduce cost and help alternative deployers, including private network operators, to enter the market. The deployment of Open RAN for offshore wind farms by Vilicom and Mavenir is an interesting case study.

Open RAN also provides an opportunity for non-traditional vendors to enter the RAN fortress, and this is attracting new innovations into the platform, as Juniper’s aggressive move on the RAN Intelligent Controller (RIC) shows. Like most early players, this involves close partnership with Intel and its FlexRAN reference platform, but Qualcomm is developing Open RAN chips, and next year will see Nvidia targeting its new Bluefield generation at the sector.

Whether that results in healthy choice or fragmentation remains to be seen, but for all the doubts about Open RAN’s ultimate viability as an open ecosystem (can small vendors and their products really address the demands of a 5G macro RAN in the near term?), the flurry of activity is certainly introducing many new ideas and developments into the market. Operators are thinking creatively about their business models, triggered by the prospect of moving to cloud-native and open networks, and by the challenge from some new entrants that are blazing these trails.

Dish Network, with its plan for a wholesale-only business while acquiring multiple MVNOs, is an interesting way to address the long-time gap in the US market for a really broad neutral host network. And Reliance Industries (RIL) may put the cat among the European pigeons if its bid to acquire T-Mobile Netherlands turns into a bigger push to expand the disruptive Reliance Jio model outside India. All these developments are covered this week, and their impact is likely to be felt throughout the autumn ahead.