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Proof that open RAN is not doing what it was originally supposed to came at the end of the year with a big deal between AT&T and Ericsson.
December 19, 2023
Barely a day has passed this year without some mention of open radio access network (RAN) technology in the telecom press. Why all the attention? The concept would certainly not strike any layperson as very exciting. In essence, it allows a telco to build a mobile site using parts and products from multiple suppliers. The lack of open interfaces between those various components has made this difficult – and so most mobile network operators buy the whole system from a single vendor.
But critics say these closed interfaces have cosseted an oligopoly of Ericsson, Huawei and Nokia and made it hard for anyone else to compete. The logic is compelling. A small company focused on developing a specific kind of radio cannot sell directly to a telco, which also needs compatible baseband equipment and software. With new interfaces, the telco could slot those radios into a network otherwise provided by Ericsson, and shazam – the whole thing should work.
The hijacking of the open RAN concept by politicians explains much of the interest. In countries such as the US and UK, where Huawei is now banned, authorities see open RAN as a way to nurture homegrown vendors or at least cultivate alternatives to Ericsson and Nokia. Amid geopolitical strife and protectionism, there is growing concern about national dependency on just two foreign providers for something deemed as important as mobile connectivity.
RAN spending declines
But open RAN is not working out as originally planned. Struggling to make an impact, smaller companies like Mavenir and Parallel Wireless have stopped specializing (both were originally focused on RAN software) and expanded into other product areas. Sustaining this, given the R&D demands, will be tough.
Moreover, this year has been marked by a decline in RAN spending. Omdia, a sister company to Light Reading, expects the global market to generate just $40.2 billion in revenues, about 11% less than it made last year. The outlook, as far as some challengers are concerned, looks bleak. Japan's NEC had previously expected to make 85.4 billion Japanese yen (US$600 million) in 5G revenues outside Japan for the 2026 fiscal year. This month, that forecast was cut to as little as JPY31 billion ($220 million).
Operators, meanwhile, have continued to wrestle with the difficulty of combining vendors. New interfaces do not appear to have made the job of systems integration much easier. But appointing a third-party systems integrator means paying someone else to do it and relying on their expertise. And the do-it-yourself alternative involves hiring or training staff at some expense.
The year has ended with a bang – the announcement of a big contract between AT&T and Ericsson. But this most talked about open RAN deal does not look very open. It will see AT&T remove Nokia from about a third of its network and switch largely to Ericsson, which was already AT&T's other RAN vendor. AT&T has indicated it will use Ericsson for both baseband and radio at many sites. Fujitsu, the only other radio vendor named in the announcement, was already integrated with Ericsson's 5G system. If this is a sign of what's to come, open RAN will make very little difference.
With all that in mind, here's a roundup of some of the top open RAN stories from Light Reading this year:
12/13/2023 – Open RAN now justifies using a single vendor
International Editor, Light Reading
Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).
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