NEC's 5G fortunes hinge on Rakuten's success

Ever since Rakuten began building what it boasts is the world's most advanced mobile network, other service providers have had a close eye on the Japanese firm. If its network shines when services go live, there is bound to be a surge of interest in using the same tools and technologies. But any upset could be dire for Rakuten's formula and the network partners that have followed it to the letter.

Chief among those companies on the hardware side is NEC, a Japanese electronics business targeting a larger role in 5G than it ever played in the 4G market. In June, Rakuten will switch on 5G radios built by NEC to new "open" radio access network (RAN) design principles, theoretically allowing one vendor's hardware to be used in conjunction with another's software. As the world's first commercial open RAN launch, it will be a litmus test of the new technology and NEC's ability to provide it.

Kazuji Tsuji, the deputy general manager of NEC's wireless network development division, alludes to the potential payoff. "There are many operators visiting Rakuten to discuss virtualized RAN networks and I am expecting to have many opportunities," he tells Light Reading. "We are hoping we can be involved in these projects."

Tsuji's remarks point to the unusually close relationship Rakuten has with some of its network suppliers. In Altiostar, the US software company integral to its RAN, Rakuten has even taken a majority stake. With NEC, the alliance seems partly an attempt to spur homegrown Japanese technology as an alternative to the "big three" of Ericsson, Huawei and Nokia, which collectively serve about 80% of the worldwide RAN market.

Indeed, the partnership took shape, says Tsuji, after NEC received government funds to carry out trials of massive MIMO beamforming, a core 5G technology used to boost performance. "Rakuten wanted to have a product that is good Japanese quality and manufactured in Japan, and of course we have our factory in Japan where we have a long history of manufacturing radio products."

But to persuade other service providers to buy Japanese, NEC must first prove open RAN is not just for emerging markets and earlier mobile generations, a criticism that dogs the new technology. Compatible with the spectrum that Rakuten uses in the 3.7GHz band, NEC's radio units are likely to figure prominently in a macro 5G network that will eventually comprise about 35,000 5G sites. For the "small cells" used in urban hotspots, Rakuten is relying on AirSpan, another hardware provider with US headquarters.

"Compact" and "high-quality performance" are the main claims that Tsuji makes for NEC's radios, while Rakuten has also drawn attention to their power efficiency. From a user perspective, any disadvantages to the traditional kit would not become apparent until the commercial launch. Industry executives may also need convincing that NEC's equipment is fully interoperable with other suppliers, and that it delivers the cost savings Rakuten has promised.

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When it comes to those costs, NEC is clearly under some pressure after Tareq Amin, Rakuten Mobile's chief technology officer, recently said its technology came "at a significant cost reduction to what you see with global partners." Tsuji reveals that NEC and Rakuten made a concerted effort to reduce the bill of materials for equipment and says deploying the units can be done more efficiently than erecting traditional gear. Partly, it seems, that is because a Rakuten mobile site features only the radio unit and antenna, with baseband equipment (used to process signals), cabling and other accessories all moved into data-center facilities.

Tsuji also attributes cost savings to automation. "It is not cheap in Japan, but we are introducing automation to minimize labor fees so that we can manufacture equipment for as low cost as possible," he explains. "And in the design phase, we tried to minimize the complexity of the mechanical aspects so that assembly is as easy as possible."

On interoperability, the launch should (if all goes well) prove that NEC's hardware is compatible with RAN software developed by Altiostar, whose products power all of Rakuten's services. NEC took specifications drawn up by the O-RAN Alliance, a prominent industry association, and used these as a "good basis" for the interface with Altiostar, says Tsuji. But he admits there are still gaps that need addressing before it is open in the strictest sense.

"Honestly, there are still some options we need to choose to make it work in combination with other vendors' equipment," he says. "But it is good enough to use as a strong baseline to define the interface. Once we can prove that it works with a combination of Altiostar, that can be a reference configuration for using open RAN interfaces together with a virtualized RAN vendor."

Doubts will persist that NEC can seriously establish itself as a viable contender to Ericsson, Huawei and Nokia, which together pumped more than $26 billion into research and development last year. Yet NEC's RAN overlap with those giants is small, and Tsuji believes they could become partners in the future.

"We are not big like Ericsson or Huawei, but with open RAN architecture, we can create a partnership," he says. "That is one of the approaches we would like to take." Persuading those giants to back open RAN technology may be a challenge. But if Rakuten's launch proves a catalyst, the resistance may start to waver.

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— Iain Morris, International Editor, Light Reading

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