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22 November 2019

Vodafone promises 100,000 OpenRAN sites in shake-up to ecosystem

The Telecom Infra Project (TIP) is a broad church in terms of membership, but increasingly, its key commercially focused activities look dominated by traditional mobile operators. That has a certain irony, considering TIP was founded by Facebook, whose messaging and social platforms have helped decimate MNOs’ SMS business and push the rewards of mobile revenue growth from telcos to over-the-top players.

It is very valuable to TIP’s progress and credibility that Vodafone, Telefonica, MTN and others are conducting field trials and discussing commercial roll-outs. But it is important to the bigger goals of TIP that its operator base, as well as its vendor ecosystem, remains diversified.

Otherwise, the risk is that traditional telcos will use the initiative to drive a low cost, open platform to improve their own economics and reduce their reliance on the major OEMs – but that Facebook’s original objective, of bringing affordable connectivity to ‘the next billion’ will be lost. That goal almost certainly requires a wider variety of service providers, including specialists in rural access and neutral host players. Otherwise, even with lower cost network platforms, MNOs will still find it hard to make an attractive case for rural, remote and industrial connectivity, and will continue to prioritize the users and applications that lie in their comfort zones.

Vodafone plans to deploy over 100,000 OpenRAN sites:

Certainly, this year’s TIP Summit in Amsterdam was more centered on the big operators, as opposed to non-traditional service providers or even Facebook itself, than in the past.

This was partly because of some high impact announcements made by several large operators, particularly Vodafone.

This high profile announcement followed directly from last year’s Summit highlight, at which Vodafone and Telefónica announced a list of non-traditional vendors which complied with their TIP OpenRAN RFI (request for information). This time, Vodafone’s head of network strategy and architecture, Santiago Tenorio, pledged to issue an RFQ (request for quotes)for OpenRAN technology for its whole European footprint (14 countries).

“That’s significantly more than 100,000 sites, and all the technologies are to tender — 2G, 3G, 4G and 5G,” said Tenorio. “We’ve invited the incumbent suppliers in Europe of course, but we’ve also invited the open RAN suppliers.”

This was a bombshell announcement in that it relates to large-scale commercial networks, not to localized greenfield trials or roll-outs, often for rural areas, which have been the main proving ground for the various open RAN candidates to date. It opens up the prospect of the shake-up of the architecture, and therefore the supply chain, which operators have talked about for so long as a key enabler of new network economics. It gives hope to alternative equipment vendors that they might be able to bid for tier one contracts, or at least for a share of such deals, in a multivendor environment. (Japan’s Rakuten is often the template, with its mixture of established OEMs, start-ups like Altiostar and systems integrators, though this operator’s focus is on the ORAN Alliance specs).

Is this more than lip service to new vendors?

But the proof will come with Vodafone’s actual contract awards. Will the operator do more than play lip service to new vendors and award the lion’s share of its potentially huge deployment to new suppliers? Assuming it has a well-proven integrator to tie everything together, what will be the relationship with the new players? Will its 100,000 sites be primarily small cells for densification and rural coverage, or will the open platforms infiltrate the main macro network in the first phase?

The answers to all these will help shape the open networking space and provide lessons for other MNOs about how to work with a new supply chain. There is the risk, of course, that Vodafone will end up choosing a traditional supplier, giving subsidiary roles, or none, to the start-ups.

The TIP Summit announcement had echoes of Vodafone’s once-traditional keynotes at Mobile World Congress, where its CEO would threaten to move to alternative architectures, as a clear bid to put very public pressure on its established OEMs to be cheaper and more compliant.

Vodafone has form in putting pressure on OEMs:

A particularly memorable example was in 2008, when then-CEO Arun Sarin said Vodafone was considering including WiMAX in its 4G platform. At the time, WiMAX was challenging the established cellular order by promising a new supply chain, WiFi-like testing and certification, and open interoperability. At the time, nobody really believed Vodafone was serious about turning against LTE and its traditional vendors. A decade later, with the various open initiatives offering similar promises to those of WiMAX, will it put its money where its mouth is?

There are two risks to the dream of a genuinely diverse and competitive ecosystem in which new vendors can move into the main networks alongside the giants.  One is that, once the major OEMs can be manoeuvered into supporting open platforms, they will have greater ability to scale the systems up in order to deliver dramatic price reductions.

The other is that open platforms need to become far simpler to deploy and run, if they are to deliver their TCO promises. The Rakuten example – and the delays to that project – highlight the complexity of pursuing a solution which involves many vendors all cooperating on an unfamiliar architecture. This involves significant spending on integrators to coordinate all the technologies and vendors, and to carry out the robust testing and optimization to make the resulting network truly scalable and carrier-grade.

But without doubt, Vodafone’s announcement, and other trials and partnerships showcased in Amsterdam, provide the greatest hope for a new open platform and supply chain, since the WiMAX days (and with a more forward-looking approach that could help accelerate the move towards cloud-native networks).

Tenorio said: “I think that right now this is the biggest tender that there is in this industry in the world. Our ambition is to have modern up-to-date, lower cost kit in every site. We are willing to swap out sites if we have to. This is going to come in the next few months. It may be a significant acceleration of the open RAN ecosystem.”

With big or small vendors, OpenRAN is accelerating:

Efforts like this do have the potential to light a fire under emerging open specifications, because they take these architectures out of the realms of lab tests, proof of concepts and demonstrations, and into live networks where they can prove their capabilities (or not). If they prove themselves, there will be real hope that operators can get away from a world where, even though standards are set, vendor have the market power to implement those standards in their own, incompatible ways, and get away with it because there is so little choice in the market.

Tenorio spoke about the latest OpenRAN trials Vodafone has been conducting in the UK and Ireland, where it has been testing its own open-sourced CrowdCell small cell, with RF partner RF provider Lime Microsystems and manufacturer Alpha. The company has also previously conducted trials in Democratic Republic of Congo and Turkey, where it has worked with Parallel Wireless, and plans one in Mozambique.

Last month, Vodafone’s group CEO Nick Read said the operator was “ready to fast track” new RAN architectures in Europe “as we actively expand our vendor ecosystem. OpenRAN improves the network economics enabling us to reach more people in rural communities and that supports our goal to build digital societies in which no one is left behind.”

Driving down costs in all Vodafone’s markets, and especially those outside Europe, are particularly urgent for the UK-based MNO. It is under particular pressure to transform its cost base, especially if it is to make its Indian strategy work – it is the market leader in India following its acquisition of Idea Cellular, but that lead is under threat from newcomer Reliance Jio, and while the sub-continent is a major growth engine for Vodafone, it is tough to make it profitable without slashing the costs of extending 4G and moving towards 5G.