December 17, 2020
The Open RAN Policy Coalition looks about as Chinese as ranch dressing or rodeo. A campaign group that urges governments to back the hyped network technology, it lists some of the world's best-known service providers and technology companies on its membership page. Not a single one hails from China.
Contrast that with the O-RAN Alliance, the group that develops open RAN specifications. The US has the most representation, with 82 members, according to research carried out by Strand Consult, a Danish advisory group. But China comes second, with 44. For the Open RAN Policy Coalition and its supporters, China's role in open RAN standards is a problem in the making.
Open RAN first surfaced nearly three years ago at Mobile World Congress 2018. It promised a new set of interfaces that would allow service providers to mix and match vendors at the same mobile site, instead of buying all products from the same supplier. Operators hoped it would inject competition into a market dominated by Ericsson, Huawei and Nokia.
Since then, geopolitics has propelled it to the very top of the telecom agenda. Non-Chinese policymakers have latched onto open RAN as an alternative to Huawei, a Chinese vendor that governments are banning and operators are ditching because of its suspected links to an increasingly authoritarian Chinese state.
Avoiding Chinese equipment makers is one thing. Skirting Chinese technology expertise is not so easy. Already, there is concern that China, through Huawei and ZTE, has too much influence in the 3GPP, the group that develops the 5G standard. Further worsening of relations between Western democracies and China could prompt a future break-up of international standards-setting bodies, according to several experts.
These circumstances leave open RAN in an awkward situation. Anyone listening to the Open RAN Policy Coalition might think the technology was born in the USA and has never set foot in China. The O-RAN Alliance shows otherwise. Its most prominent Chinese members include ZTE, an equipment vendor that was on a US trade blacklist until it hawked up billions in fines. Also named are China Mobile and China Telecom, two state-backed operators that turned up on a Pentagon blacklist in June.
China Mobile is a busy member of the group, says a source who requested anonymity. That is hardly surprising as it was arguably the main force in the C-RAN Alliance, a Chinese group whose merger with the largely American xRAN Forum created the O-RAN Alliance in 2018. Today, the Chinese operator is a very active contributor to specifications, according to Light Reading's source. ZTE has been similarly engaged, said sources within the company at the start of the year.
None of this will be very palatable to US politicians determined to block China's influence. Yet any break-up of the O-RAN Alliance into C-RAN Alliance and xRAN Forum camps would be a major setback for open RAN. It would complicate development and threaten new disputes over intellectual property.
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Right now, the issue of technology patents means the O-RAN Alliance faces a potential dilemma about involving Huawei. The group's interfaces build heavily on specifications developed outside the O-RAN Alliance by Ericsson, Nokia, NEC and Huawei. The Nordic and Japanese vendors have all now joined the club, agreeing to license their patents on fair, reasonable and non-discriminatory (FRAND) terms. But Huawei has not. There is concern it could attempt to thwart open RAN by arguing its patents have been infringed.
While addressing that risk, its membership of the O-RAN Alliance would create other problems. For one thing, China's biggest slab of tech R&D muscle would – paradoxically – have gained entry to the design room of the technology touted as a Huawei substitute. US policymakers able to live with China Mobile and China Telecom might balk at the involvement of telecom public enemy number one.
Figure 1: Open RAN forecast Source: Appledore Research.
It would also make all three big kit vendors a part of the specifications group. That would increase the likelihood that Ericsson, Huawei and Nokia become the main suppliers of open RAN products, frustrating efforts to nurture competitors. There are already doubts that smaller rivals will be able to land much open RAN work. Appledore Research, an analyst firm, reckons open RAN will generate $11.1 billion in revenues in 2026. As much as $8 billion will go to the incumbents, it predicts.
Ever wary of open RAN, Huawei signaled its growing interest in the technology in July, when Victor Zhang, its vice president, was being grilled by UK politicians. "We are watching open RAN as one of the choices," he told a parliamentary committee. "Once it has comparable performance to single RAN, we believe Huawei will be one of the best suppliers of open RAN as well." Outside China, an open RAN ecosystem that makes space for Huawei could fast lose its appeal.
— Iain Morris, International Editor, Light Reading
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