Docomo pitched tech Deutsche Telekom could use to handle Huawei

Nine months before Germany imposed limits on Huawei, Japan's NTT Docomo was flaunting a related software tool called service management and orchestration (SMO, for short). Used to control and do automated updates of the radio access network (RAN), it is positioned as a successor to today's conventional management systems. If a German telco has bought its RAN from Huawei, it must find a substitute for the management system by 2029, under government rules published in July. Docomo's SMO technology, sold through an offshoot called OREX SAI, might hold the answer.

Launched earlier this year, OREX is pitched as a joint venture between Docomo, Japan's biggest telco, and NEC, a Japanese electronics vendor active in the network equipment market. But Docomo is the majority owner, with a two-thirds stake in the new company. Its mission is to sell products and services based on the open RAN concept. In a traditional RAN like those built by Huawei, proprietary interfaces require telcos to buy all the parts for any site from the same vendor system. Open RAN promises standardized interfaces to aid vendor combos.

What has any of this to do with Docomo? While it has not previously been a supplier to other telcos, the Japanese operator does claim to have built the largest open RAN in the world, one that originated in the days of 4G. Typically, that has meant pairing one supplier of RAN compute with a different supplier of radios. As telcos in other countries wrestle with the same challenge, Docomo spies a commercial opportunity to sell its expertise.

OREX, then, already boasts a catalog of partners from different parts of the value chain, even including rivals to NEC such as Fujitsu and Mavenir. The special sauce from the Docomo side is the investment it has made in systems integration. Open interfaces do not mean telcos can simply join vendors together like plugging a USB jack into a smartphone.

Combining parts is more like mixing ingredients to produce a successful drink, and OREX comes with a menu of cocktails that work, according to the company. "We provide pre-integrated solutions to operators because they do not have enough capability to integrate by themselves," said Sadayuki Abeta, OREX's chief technology officer, on a call with UK reporters this week.

Avoiding a costly swap

The SMO technology is a Docomo-developed part of the OREX package that could help operators with the control and management of multivendor networks. It draws on several interfaces developed by the O-RAN Alliance, the telco-led group behind open RAN specifications. Through O1, a critical interface, a customer could theoretically combine Docomo's SMO platform with any vendor's RAN.

This all handily dovetails with developments this year in Germany. Following legislative moves, Deutsche Telekom showed how a new management system it controls might underpin RAN infrastructure supplied by multiple vendors. A substitute for Huawei in this area would allow the operator to keep the rest of Huawei's RAN products and avoid a swap-out costing up to €1.1 billion (US$1.2 billion), according to a Barclays estimate. Technical discussions have taken place with Deutsche Telekom about using OREX's SMO platform, confirmed Abeta this week.

The challenge for OREX and other SMO developers is making the technology fit with a conventional RAN. Huawei remains publicly opposed to the concept of open RAN, and the management systems that the vendor provides today are tightly integrated with its other RAN parts and software. A workaround, according to one expert, could involve the use of tools developed by the Operations Support Systems interoperability initiative (OSSii), which predates the O-RAN Alliance. With that, a route could be established between the SMO platform and the RAN by way of the existing management system. Ultimate control would move to the SMO platform.

At the very least, however, this would require Huawei to expose those proprietary northbound and southbound interfaces. What's more, Abeta did not sound positive about the efforts made by established suppliers so far. "Incumbent vendors are not so open yet," he said in response to questions.

But another source thinks Huawei will do the bare minimum to protect the bulk of its German business, quitting its role in management systems if this allows it to remain a supplier of all other RAN products. No doubt, Huawei would rather collaborate with the likes of OREX than with a direct competitor such as Ericsson or Nokia, both of which are also likely to resist work on a scheme that mainly benefits Huawei.

The uncertainty is whether there is room for OREX in Deutsche Telekom's plans. Much like Docomo, it has been working on its own management system, revealed a source with knowledge of the matter before Deutsche Telekom appeared to confirm the activity in a published statement. At the German telco's recent capital markets day, Claudia Nemat, its board member for technology and innovation, said: "We are also developing our own RAN management system to control cost and experience also in the future and to have a solution for the Chinese vendor risk."

There may be a bigger opportunity for OREX within the networks of Telefónica and Vodafone, Germany's two other big mobile networks. Both rely heavily on Huawei's RAN products and are subject to the same rules about the management system that affect Deutsche Telekom. Unlike the German incumbent, neither has said anything about the development of a homegrown SMO alternative.

Asian focus

Regardless, Abeta is clearly disappointed by what's happened in open RAN outside Asia. The concept has still not moved beyond trials and into commercial deployments across much of Europe, he said. Deployments in the US have been "single vendor" in nature, he added, with a smile on his face. The remark is a clear reference to the $14 billion contract Ericsson announced with AT&T last December. That deal removes Nokia from the AT&T network and seems to leave few opportunities for other suppliers.

Progress appears to have been much better in southeast Asia, now the focus of an OREX marketing push. The company is working on projects in Cambodia, Indonesia and Singapore and hoping to generate revenues from providing systems integration expertise along with the sale of SMO technology. The immaturity of 5G (and even 4G) in some Asian countries makes them an easier target for OREX, said Abeta. Local governments, meanwhile, see an opportunity to create jobs in delivery and construction.

Still, Abeta does not expect to see commercial deployments at scale in the region until 2026 or 2027, and the big kit vendors remain the dominant RAN forces in Asia and elsewhere. Worldwide, revenues generated from the sale of RAN products dropped 11% last year and are expected to fall 7% to 9% in 2024, according to Omdia, a Light Reading sister company. Abeta insists OREX is not giving up on Europe and the Americas. But the popularity of single-vendor deals combined with a widespread failure to evict Huawei have hardly been helpful.