A Dell server based on Intel's FlexRAN technology, intended for the distributed unit (DU) in a radio access network (RAN), costs about $4,600, more than twice as much as comparable equipment from Ericsson or Nokia, according to slides shared with Light Reading and validated by one high-level technology executive within a telecom operator, who supplied input on condition of anonymity.

The data is counterintuitive because the open and virtual RAN technology that FlexRAN supports is typically marketed as a low-cost alternative to the traditional kit sold by the Nordic vendors. Rakuten, a Japanese company using FlexRAN, reckons an operator investing in open RAN would save about 40% on capital expenditure (capex) alone. Rival Mavenir, another Intel partner on FlexRAN, has previously claimed an operator can save 49% on capex in year one of a deployment by using virtual instead of traditional RAN technology.

The cost information was shared by Vinay Ravuri, a former executive at Qualcomm who left it in 2018 to set up his own chips company, EdgeQ, which has just raised $75 million in a second round of funding (more on that later). During an interview with Light Reading, Ravuri blamed the expense of the Intel-based equipment for telcos' unwillingness to invest in open RAN (O-RAN), which today accounts for a low single-digit share of the overall RAN market.

Figure 1: A traditional radio site where all the technology comes from Ericsson.
(Source: Ericsson)

"The equivalent is about $2,000 for an Ericsson or Nokia proprietary solution. Why would anybody go to O-RAN if that is the cost structure and difference?" said Ravuri. "The biggest problem is the cost. When cost is a problem, nothing really gets off the ground, especially in the telco space."

The figure of $4,600 is for the cost of goods before any production-ready software has been added to the mix. It covers the central processing unit (CPU) from Intel, a separate card for a RAN function known as forward error correction (FEC), a smart network interface card (NIC) and circuitry for timing synchronization.

Details shared with Light Reading show the server in question could support a 32-antenna system with 1,000 active users and 2,000 connected users and that it comes with a power measurement of 300 watts and a "user rate" measurement of 15 Gbit/s. Graphics from a redacted version of the slide Ravuri shared are reproduced in this story. Omitting company names, references to FlexRAN and cost specifics, they were sent to Light Reading by EdgeQ representatives after the interview.

Ravuri blamed high costs on the use of too many separate components along with the unsuitability of Intel's x86 technology for the RAN. "It is a Swiss army knife for data centers," he said. "It runs databases and all kinds of crap you don't need in a basestation. It is actually a very bad processor for that." General-purpose processors Intel sells under its Xeon brand "cost a lot of money and don't necessarily provide the equivalent value back," said Ravuri.

RISCy business

As the developer of a rival technology, Ravuri has a vested interest in attacking Intel, which chose not to comment on his cost claims when approached by Light Reading. Nokia declined to say anything about the cost of its traditional kit, while Ericsson said it never comments on commercial or pricing conditions.

But EdgeQ is now pitching an alternative DU technology based heavily on RISC-V, an open-source architecture. It has managed to lower the cost to the same level as proprietary technology sold by Ericsson or Nokia by integrating most technical functions into a single chip, said Ravuri. "The $5,000 I showed we can bring down to $2,000 and it is not with us discounting anything. Our gross margins are 70-plus points."

Figure 2: Today's traditional O-RAN approach, according to EdgeQ (Source: EdgeQ)

The Series B funding of $75 million is an endorsement of EdgeQ's vision and follows a Series A round in 2020 that raised $51 million, according to Crunchbase. Funds come from a small army of institutional investors spread across the world as well as a smaller number of "strategic" investors. "We're not disclosing the names, but they are big household names in the industry," Ravuri told Light Reading. Touting partnerships with Vodafone and Mavenir, an Intel client, he said the first commercial deployments of EdgeQ's technology would happen this year.

Besides the underlying chip architecture, what really distinguishes EdgeQ from others is its development of fully deployable Layer 1 (also called the physical or PHY layer) software to go with its silicon. EdgeQ says its software can also be tweaked after deployment. This Layer 1 software looks after some of the most computationally intensive number-crunching that happens in a RAN and has been largely overlooked, in Ravuri's assessment.

Intel's FlexRAN is only a reference design for software companies like Mavenir and Rakuten to work with, and Layer 1 software from big kit vendors such as Ericsson and Nokia is usually bundled into a fully integrated RAN and not separately available. Chip companies including Marvell Technology and AMD, Intel's only big x86 rival, do not even have widely used reference designs, let alone fully deployable software. "What we're doing is working with partners that have full-stack solutions," said Nick Hancock, the director of the telco vertical at AMD.

Tightly coupled

The criticism companies could level at EdgeQ is that its hardware and software come as an inseparable pair. An integrator would not be able to run EdgeQ's Layer 1 software with another chipmaker's Layer 1 silicon. "We would not separate our silicon offering from Layer 1 software," EdgeQ representatives confirmed by email when pressed on this point. This would seem to make it no better in that regard than FlexRAN, which only works with Intel processors, and some operators want the freedom to use any software with any hardware. Even FlexRAN involves other Layer 1 software contributors.

Also unclear is whether Intel's recent technology updates would address some of the cost issues identified by Ravuri. Acknowledging general-purpose CPUs are suboptimal for Layer 1, Intel previously backed a system called "lookaside" acceleration, which introduces other components to support the FEC function, shown as a separate element in the slide EdgeQ shared with Light Reading. But Intel says a newer alternative integrates acceleration into the main chipset.

Would this negate EdgeQ's cost advantage? "The EdgeQ solution is about massive integration coupled with software programmability coupled with complete PHY and MAC software layers, all at a compelling 1/2 power and 1/2 cost," said EdgeQ representatives by email. "These are all core ingredients necessary and not currently offered by FlexRAN solutions. Our level of integration includes chipset functionalities of 4G, 5G, fronthaul, midhaul, timing sync, AI and host processing. This is rather different from accelerating features."

Regardless, the tight coupling of hardware and software by EdgeQ does raise questions about its opportunity. In a market for merchant silicon, big RAN vendors such as Ericsson and Nokia would typically integrate their own Layer 1 software with silicon from the likes of AMD and Marvell. A commercial relationship with EdgeQ would require them to relinquish not just the silicon role but the software activity as well.

"People think that Nokia and Ericsson and Samsung want to implement their own PHY, but if they could source the PHY from outside and if it's as good as theirs they wouldn't care," said Ravuri. "There is going to be some inertia there, because they have large teams doing Layer 1, but ultimately they don't really care."

It's a debatable point. "When we look at cloud RAN, we believe we need to separate out any software implementation independent of the underlying hardware and that, I believe, is a differentiator because that is true virtualization where you are not depending on any underlying hardware," said Fredrik Jejdling, the head of Ericsson's networks business, during a short interview with Light Reading this week. "That is what we believe our customers are asking for because it provides true openness and true mobility in the software stack."

Ericsson has now developed virtual RAN Layer 1 software that does not use FlexRAN and can be deployed on silicon from either Intel or AMD, said Jejdling. 

Whatever the pro and cons, EdgeQ is likely to be welcomed in a market where Intel has so far been the only serious option for companies deploying virtual RAN technology. And it is not just the $75 million in new funds it can shout about. This week, EdgeQ also announced that Jim Anderson, a man previously credited with the turnaround of AMD's computing business, would join it as a board member.

Anderson currently runs Lattice Semiconductor, a chips company that made about $660 million in sales last year. Before that, he worked in a senior role at LSI Corporation, known for stitching together integrated circuits for Ericsson and Nokia before it was eventually sold to Broadcom. It's a track record that will surely benefit EdgeQ.

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— Iain Morris, International Editor, Light Reading