Open FAN blows into Madrid on geopolitical winds of change
MADRID – FYUZ – Everyone's heard of open RAN. Now there's open FAN. Not to be outdone by a mobile relative that gobbles up a bigger share of equipment spending, the fixed access networks (FAN) sector has taken up the cry of "open" with a new initiative announced here in Madrid, spearheaded by Telefónica, Telecom Italia (calling itself TIM, for Telecom Italia Mobile, despite its ongoing interest in fixed) and Vodafone.
As in the radio access network, the goal is to ensure products from competing vendors can be combined in the same fixed access network like dishes from different countries on the same plate (this week in Madrid has been heavy on the food metaphors). The main push in open RAN has been for an open fronthaul interface allowing one vendor's baseband products to communicate with another supplier's radios. Open FAN is targeting the link between optical line terminals (OLTs) and optical network terminals (ONTs), the boxes that sit at either end of a fiber connection. Integration with SDN controllers, the traffic cops of the network, is another priority.
Open FAN has therefore become the latest sub-group of the Telecom Infra Project (TIP), the Facebook-led effort to spur innovation and lower costs in the telecom equipment industry. Participants are currently drawing up technical requirements for a so-called "pizza box" OLT that can be delivered to the local exchange. They will issue a request for information later this year as they assess the technical capabilities of vendors and their "readiness" for open FAN.
It all points to some telco unhappiness about the state of the FAN market. "The disaggregation of OLTs represents a valuable opportunity to broaden the telecom supply chain, which we've seen has become more important than ever during recent times," said Paolo Pellegrini, TIM's access innovation project manager, in telling remarks. "TIM is excited about the opportunities to work with a new generation of hardware and software suppliers who can bring innovative solutions that will help us build more cost-effective and efficient networks."
Concern about the state of that supply chain is not surprising. Data from Omdia, a sister company to Light Reading, shows that just three vendors controlled 85% of the market for OLTs last year. Two of them, Huawei and ZTE, are Chinese, leaving Nokia as the only big Western supplier. The lack of alternatives explains why the UK government was less restrictive in fixed than it was in mobile when clamping down on Chinese vendors.
TIP probably hopes interoperability will boost competition in a market for passive optical network (PON) products worth about $8 billion in sales last year. If operators could more easily buy OLTs separately from ONTs, developers could focus resources on one area. An OLT specialist would not require an ONT capability to compete.
Today, mixing FAN products from different vendors is problematic, said a source at TIP, and Nokia seems to agree. "It is not easy to do, but it is something that we do," said Federico Guillén, the head of Nokia's network infrastructure business group, during an interview at the recent Network X event in Amsterdam. "If you do this, you have to put in some rules for how the OLT and the ONT communicate and set a lower denominator, which means you are missing some features. Interoperability doesn't come for free."
Telecom already has an interface for connecting OLTs to ONTs, called OMCI (for ONT management control interface). But when it comes to multivendor interoperability, this does not seem to have delivered. "It was perfectly standardized, and everyone was implementing and following, but they were choosing different options," said Stefaan Vanhastel, the chief technology officer for Nokia's fixed network unit.
Nokia served about 24% of the global PON market last year, according to Omdia's data, but has increased its presence in OLTs, according to Guillén. A backlash against Huawei in many countries outside China has probably helped. "Our market share is growing, especially where we want it to grow, which is the OLT side," he told Light Reading. "The ONT side is a very crowded space."
Specialists may find that challenging Nokia in the FAN is just as hard as it is in the RAN. Last year it pumped €4.2 billion (US$4.2 billion) into research and development, including investments in the silicon platforms that support higher-speed broadband services. At Network X, it announced a new OLT, branded Lightspan MF-14, that provides an upgrade path to 100G-capable networks. "Operators have a solution that will be reusable as line cards are upgraded over time," said Julie Kunstler, chief analyst with Omdia. "This has lots of capacity and ONTs will be upgraded as needed."
What, no vendors?
There was no mention of vendor support for open FAN in the TIP's statement and without that it could struggle. If enough operators urge change, those vendors may have to budge – but the wariness of Ericsson and Nokia about open RAN illustrates just how difficult that could be. Open FAN also appears to lack an equivalent of the O-RAN Alliance, the group developing open RAN specifications. TIP has previously distanced itself from specifications development. If an alternative to OMCI is needed, who takes the lead?
Whether open FAN becomes as big a deal as open RAN is doubtful. For one thing, operators spent about $37 billion less on FAN products last year than on RAN kit, according to Omdia's numbers. Most of their fixed-line capex goes into civil engineering, and no amount of interoperability or virtualization will save money there.
Despite the muscle of Huawei, Nokia and ZTE, the market was also growing more competitive before open FAN was a thing, according to Omdia's Kunstler. Ciena, an optical equipment vendor based in the US, and Sterlite, an Indian firm that sells fiber-optic cable, are just two examples of companies moving into a PON market forecast to generate nearly $16 billion in annual sales by 2027. Open FAN might just be a solution in search of a problem.
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- OFC 2022: Omdia analysts size up the PON market
- Omdia's Julie Kunstler on what's going on with PON
— Iain Morris, International Editor, Light Reading