Orange: Still No Clear Business Case for vRAN

BARCELONA -- MWC 2018 -- The lack of a clear-cut business case has stopped France's Orange from forging ahead with the virtualization of its radio access network (RAN), the operator's director of spectrum strategy and planning told Light Reading here in Barcelona.

Yves Bellego said Orange's trials of vRAN technology have gone smoothly from a technical perspective but that any business benefits were not immediately apparent.

"We did not go beyond trials or a proof of concept because of the business case," he said on the sidelines of this week's Mobile World Congress. "As of today it remains cheaper and simpler to upgrade each and every site."

In today's networks, the baseband equipment that processes radio signals is located near radio units at the cell sites. RAN virtualization would in theory allow an operator to do its baseband processing over common, off-the-shelf servers housed in data centers or edge-network facilities.

Experts say this could lead to cost savings and other efficiency benefits, but Orange (NYSE: FTE) is wary. "We do not think savings is the initial driver," says Bellego. "There are initial costs we must take care of and so there must be other drivers."

The chief cost concern relates to the upfront investment. After separating baseband processing from the remote radio units, an operator might need to run fiber between them -- in a so-called "fronthaul" arrangement -- to cope with capacity demands. The disaggregated servers running baseband functions would also need to be housed somewhere, which could entail investment in new edge facilities.

Bellego's position is not altogether surprising. Orange has been far more cautious than many other operators when it comes to the cost benefits of networks function virtualization (NFV). Instead, it has focused on other business attractions. NFV should allow it to introduce new services much faster than was previously possible, for instance. Full virtualization should also reduce "lock-in," whereby operators are tied to one supplier and its products.

For the same reason, it is now exploring whether vRAN could lead to benefits other than cost savings. "We have been looking to see if there are additional capabilities on radio. Could we improve capacity by having pooled functions?" says Bellego. "Pooling BBUs [baseband units] could help with automation and edge computing."

With edge computing, telcos might place various compute-and-storage resources in aggregation points, much closer to end users, instead of relying on big centralized, data centers. This move could help to reduce latency, the signaling delay on data networks, and open up new service opportunities.

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Edge computing is likely to receive a boost from the arrival of 5G technology, which promises to cut latency to millisecond levels. Such capabilities might be used to support applications like remote surgery and self-driving cars in the years ahead.

In any case, any investments that Orange eventually makes in vRAN technology are likely to start in dense urban areas, where fiber networks are readily available. "In urban areas with fiber, pooling should be something that is beneficial in the end," says Bellego. "The point is that the initial benefits are not so clear today."

Orange this week became one of several large operators to form a new association called ORAN (for Open RAN), which is aimed at bringing white box and open software technologies into the radio access network. (See Major Telcos Pool Efforts to Slash 5G RAN Costs.)

Formed from the merger of xRAN and C-RAN, two older initiatives, ORAN counts AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo and Orange as founder members.

— Iain Morris, News Editor, Light Reading

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