Why Resistance to the Open RAN May Crumble
What a disaster it would be for the mobile industry if a certain vendor's network gear were compatible with only a certain type of handset. Imagine having to use the same supplier across the transport, core and radio access networks. It is probably a safe assumption that today's mobile markets would not feature billions of customers if such restrictions were in place.
Thanks to the efforts of standards groups like the 3GPP, and coordination between the different stakeholders in the telecom industry, operators can freely pick and mix the suppliers of their main network building blocks. Open standards have been a guarantor of interoperability and an undoubted spur to industry growth.
But taken in isolation, the radio access network (RAN) is far from truly open. To the most ardent critics, it still looks like a giant black box, an elaborate prison in which telcos are frog-marched around by key-jangling guards such as Huawei Technologies Co. Ltd. and Ericsson AB (Nasdaq: ERIC). Pulling off a great escape has recently become a strategic priority for some of the world's biggest operators. And despite the obstacles, it stands more chance of success than the typical jailbreak.
What are the foundations of this RAN prison? To the opponents of the giant vendors, the problem is that various interfaces used in the RAN are not as open as they should be. These include such arcane technologies as X2, an interface that supports handover between basestations in 4G networks, and the F1 system that will go into future 5G networks. But the chief culprit is CPRI (for common public radio interface), which provides a link between the actual radios and the baseband equipment that processes radio signals. "At the moment, that is more or less proprietary," says Gabriel Brown, a principal analyst with Heavy Reading. (See Is vRAN Still Too Hot to Handle?)
The inevitable consequence is some degree of "lock-in." An operator buying its baseband equipment from Ericsson has to purchase radios that work on the Ericsson system. Usually, that means buying Ericsson radios, as the Swedish vendor acknowledges. "The interface between baseband and radios is proprietary," says Arun Bansal, the head of Ericsson's business in Europe and Latin America. "Operators have to choose the same vendor."
The great escapers are conspiring in a group called the Open RAN Alliance (shortened to ORAN Alliance), unveiled at this year's Mobile World Congress. It comprises two older associations: the xRAN Forum, whose operator members include AT&T Inc. (NYSE: T), Deutsche Telekom AG (NYSE: DT), SK Telecom (Nasdaq: SKM) and several other telco giants; and the C-RAN Alliance led by China Mobile Ltd. (NYSE: CHL). By smashing apart or veering around CPRI and other obstacles, the ORAN Alliance hopes to foment RAN competition, lower network costs and make RAN "virtualization" much easier. (See Major Telcos Pool Efforts to Slash 5G RAN Costs.)
It is now moving quickly. In the last couple of months, the xRAN Forum has come up with an alternative to CPRI that promises the freedom and efficiency operators crave. "The specification exists and is fully defined in terms of protocols, and the O&M [operations and maintenance] piece is being added," said John Baker, a senior vice president with software vendor Mavenir, an xRAN Forum member, during a recent conference in London. "It is based on IP [Internet Protocol] transport instead of expensive proprietary hardware." (See Mavenir's Billion-Dollar Blueprint and It's Alive! Verizon & Friends Deliver First xRAN Spec.)
This new "fronthaul" interface could, in time, be a candidate for a 3GPP-sanctioned CPRI alternative, says Brown, who is putting together a Heavy Reading research and marketing program to explain and explore the opportunities for open RAN technology. With that interface, operators should eventually be able to purchase radios for their baseband technology from a multitude of suppliers, according to Baker. "We are moving from a world where people are buying complete networks from one vendor," he said. "There are opportunities to change the ecosystem and use virtualized software, open source and COTS [commercial off-the-shelf] hardware platforms."
Next page: RAN rebellion
But skeptics doubt any such transition will be straightforward. The RAN rebellion is bound to hit resistance from the prison guards, they argue. After all, Ericsson, Huawei and Nokia Corp. (NYSE: NOK), the third member of the global equipment triumvirate, have profited handsomely from RAN lock-in, giving them little incentive to change. As it tries to grow its share of the baseband market, Ericsson knows customers will have to buy its compatible radio gear when they start to roll out 5G services.
Yet Nokia, perhaps counter-intuitively, is already a member of the xRAN Forum. While the open RAN would seem a challenge to its own business model, the Finnish company possibly sees greater risk in trying to hold back the tide. "The voice from the big operators is pretty strong on this now," says Brown. "There is a lot of pressure from the buyers to do this, and with the ORAN Alliance there is one group for the industry to get behind."
Interestingly, Nokia is already participating in more open arrangements with its customers. Several months ago it announced a deal with Japan's NTT DoCoMo Inc. (NYSE: DCM), an ORAN Alliance member, to provide baseband units that are compatible with radios from a different vendor. "DoCoMo could be using Fujitsu or NEC," says Brown. "It is already happening in the sense that the big vendors use OEM [original equipment manufacturer] partners, or work in collaboration with an operator."
Could Ericsson similarly relinquish its keys? When Light Reading last contacted Ericsson on this topic in April, it sounded wary. "We welcome all discussions around openness. However, we have currently no public statement on the ORAN Alliance," said a company spokesperson. "We are in continuous contact with our operator customers and other shareholders in the industry, also the ones currently associated with ORAN, to ensure we continue to develop the right products that make operators successful in their markets and satisfy their end users' needs in the best way possible." (See Nokia Seizes Open RAN Initiative as Ericsson Holds Back.)
Joining the ORAN Alliance would clearly be a trickier step for Ericsson than it has been for Nokia. For starters, the Swedish company is obviously more dependent on the mobile market than its Finnish rival. Under its current strategy, its chief focus seems to be 5G market leadership on existing market principles. Current CEO Börje Ekholm does not seem like one for daring gambits. Ericsson has also steered clear of other associations set up to promote openness. That includes Facebook's Telecom Infra Project, which is also developing open RAN technologies and counts Nokia as one of its biggest members. (See Facebook's TIP Seizes vRAN Initiative From 3GPP.)
Yet Heavy Reading's Brown expects Ericsson to participate in the ORAN Alliance in the not-too-distant future. In his view, the growing pressure from service providers is a natural response to waves of industry consolidation that have reduced RAN supplier numbers from eight to just three or four globally. The operator pressure will be hard to resist, says Brown, and the historical narrative undermines the argument that Ericsson has some kind of "Machiavellian plan" to block the open RAN.
"The reality is market forces have driven consolidation in RAN and to ignore that is narrow-minded," says Brown. "Operators will push Ericsson to do it and I don't think Ericsson is philosophically against it. I expect them to participate."
Moreover, an open RAN could throw up new opportunities for Ericsson and its kin. Given the challenge of integrating technologies from multiple suppliers, systems integrators could figure prominently in operators' plans. If traditional equipment makers do not try to fill this role, technology companies like India's Tech Mahindra Ltd. could step into the vacuum. "They have expressed interest and could potentially do it," says Brown. Tech Mahindra, intriguingly, took a 17.5% stake in Altiostar, a company developing virtualized RAN products, at the start of the year.
Innovation on the radio side could also drive both operators and vendors toward the open RAN. Instead of waiting for Ericsson or Nokia to handle a particular request, an operator could turn to a smaller, faster-moving radio specialist. And through partnerships with specialists, Ericsson and Nokia could themselves better satisfy customer needs in a timely fashion.
"At the moment, for example, if an operator needs a certain type of product to meet a rural coverage requirement for regulatory reasons, it might not be that high on the priority list for an equipment maker with hundreds of customers," says Brown. "There is a lot of innovation in radio products, but the process of OEM integration slows down the rate at which this innovation can be deployed."
The development of a "white box" market for radio gear is unlikely to happen fast. One of the challenges will be stimulating independent radio vendors to develop products. As with the virtualization of core networks, concern about the operational complexity of managing different suppliers remains paramount. And what sounds good on paper might not turn out exactly as planned. But Nokia's involvement in the ORAN Alliance is already a sign the jailers are switching sides. With Ericsson's participation, even as a relatively silent partner, the RAN prison would be on even shakier ground. (See vRAN Tech Hits Resistance at SK Telecom and Orange: Still No Clear Business Case for vRAN.)
— Iain Morris, International Editor, Light Reading