Mingling with Chinese companies named on the US naughty list has suddenly rattled Nokia.
The Finnish equipment maker has been a member of the O-RAN Alliance ever since its inception. It also claims to be one of the most active contributors to the group's work of developing more interoperable specifications for mobile networks. But all that has stopped – temporarily, at least.
Just weeks after another Chinese member was named on the Entity List – a trade blacklist maintained by the US government – Nokia is shutting down its O-RAN Alliance burners. Its fear seems to be that working alongside companies deemed criminals by the Biden administration could expose Nokia to US sanctions.
First reported by Politico, which saw an email about the suspension of O-RAN Alliance work, the move has now been confirmed by Nokia. In a statement sent to Light Reading, the company said: "Nokia's commitment to O-RAN and the O-RAN Alliance of which we were the first major vendor to join, remains strong. At this stage we are simply pausing technical activity with the Alliance as some participants have been added to the US entities list and it is prudent for us to allow the Alliance time to analyze and come to a resolution."
Three Chinese firms have reportedly provoked jitters in Espoo: Inspur, Kindroid and Phytium. Added to the Entity List in mid-July, the relatively unknown Kindroid was targeted alongside another Chinese firm (not in the O-RAN Alliance) called Hangzhou Hualan Microelectronics because their activities were considered "contrary to the national security and foreign policy of the United States," said the US Bureau of Industry and Security (BIS).
"Specifically, the ERC [End-User Review Committee] determined that these entities are acquiring and are attempting to acquire US-origin items in support of military modernization in the People's Liberation Army," said the BIS statement. Other firms with US-origin technologies are effectively prohibited from dealing with Entity List organizations.
Breaking up the club
However the Nokia situation is resolved, it will stir up concern about the survival of international standards bodies in a geopolitically divided world. The 3GPP – as a much larger group than the O-RAN Alliance – presides over the development of today's mainstream 5G standard and counts China's Huawei as one of its most active contributors. Placed on the Entity List by Donald Trump, Biden's White House predecessor, Huawei has become public enemy number one to some US politicians. Yet American and European firms, including Nokia, continue to mix with it inside the 3GPP.
Breaking up that club would have major ramifications for the industry and its main players. In a recent, exclusive interview with Light Reading, Ericsson CEO Börje Ekholm expressed concern that a bifurcation of the mobile standard might be a loss for the West. "If the tech world is fragmented East and West then it is going to mean competition between two ecosystems," he said. "A Chinese ecosystem will be formidable competition for the West."
There is unlikely to be the same fallout if the far smaller O-RAN Alliance breaks apart. Nevertheless, it would be a massive blow to open RAN, the technology concept the O-RAN Alliance is pushing. Today, operators usually buy all the radio access network technologies for a particular site from the same vendor system. With open RAN's new interfaces, operators would, in principle, be able to mix components and software from different suppliers. Somewhat ironically, given the news about Nokia, open RAN is seen by some operators and politicians as a safe alternative to Huawei, now banished from numerous Western countries.
For the O-RAN Alliance, the optimum outcome is that Nokia swiftly resumes work after making the necessary checks with its lawyers and receiving assurances from US authorities. But if Nokia is worried about the potential cost of breaching US sanctions, then other O-RAN Alliance members are likely to be similarly anxious. "It can have a huge impact on your business," says John Strand, the CEO of Danish advisory group Strand Consult.
More Chinese than Xi Jinping
Inspur, Kindroid and Phytium are not the only concerns for Western players, either. Announced to the world in early 2018, the O-RAN Alliance was formed when the largely American xRAN Forum agreed to merge with the Chinese C-RAN Alliance – a marriage of convenience that suddenly looks very inconvenient. The xRAN Forum's main sponsors included AT&T, Deutsche Telekom, SK Telecom and Stanford University. The most prominent backer of the C-RAN Alliance was China Mobile, China's largest, state-controlled operator. It has also been hit with US sanctions this year, as have the smaller China Telecom and China Unicom, which are also members of the O-RAN Alliance.
In total, some 44 members of the club are Chinese, according to research carried out by Strand Consult, giving China a bigger representation than any country bar the US. Aside from the Chinese operators, the largest is ZTE, a government-controlled Chinese vendor that was only removed from the Entity List in 2018 after it had agreed to pay fines, replace management executives and be subject to US scrutiny.
"The ostensible purpose of open RAN was to limit the presence of vulnerable Chinese government technology in networks," said Strand Consult in a research note published today. "In point of fact, O-RAN Alliance members exchange specifications on open RAN every six months; this means that the 44 Chinese companies including those on the US Entity List get fresh open RAN 'code' at least twice a year."
If the O-RAN Alliance does become unsustainable as an international group, open RAN technology would be in trouble. To make it acceptable to US authorities, it might ultimately have to be cleansed of Chinese intellectual property – a process that seems unlikely to be straightforward.
Without specifications drawn up by a multi-vendor, multi-operator association, open RAN would be worthless. Equipment suppliers could always promise compatibility with rivals in the absence of an agreed standard, but they were doing this long before the xRAN Forum took shape. Promises alone were not enough for a service provider community frustrated by vendor foot-dragging on interoperability. For the telcos that have started to invest in open RAN technology, the latest news is alarming.
- Biden spots yet another Chinese stinker in open RAN
- Ericsson CEO warns China will be 'formidable' if 5G or 6G splits
- Intel is building an open RAN fortress, but it's also under attack
- China's role in open RAN is a looming problem
- Open RAN threatens new clashes over intellectual property
— Iain Morris, International Editor, Light Reading