Nobody hires an orchestra to play the classics when it lacks a violin section. Such is the essential problem that has faced Symphony, the business unit Rakuten set up in 2021 to sell telecom network products. Symphony did score a contract to build an entirely new mobile network in Germany for local operator 1&1. But securing big deals with existing "brownfield" telcos has proven much harder. By its own admission, Symphony has been missing some critical notes.

"It is just about bridging the gap on key feature sets that we never had on LTE," said Tareq Amin, the CEO of Rakuten Symphony as well as Rakuten Mobile, the part of Rakuten responsible for its own mobile network in Japan, during an interview with Light Reading. "5G is no problem. It's just the legacy features on LTE that we need to carry through to be able to prove that we can swap a product and still carry a reliable commercial service with no interruption to the services that the consumers have in the brownfield environment."

Figure 1: Rakuten Symphony is trying to fill gaps in its product portfolio.
(Source: Rakuten)

The important gaps, as conveyed during a Rakuten earnings update last week, include carrier aggregation (CA), multi-layer management, the Cat-M "Internet of Things" standard and energy savings. Rakuten says it is 80% to 90% there on CA and energy savings, about halfway done on multi-layer management and 60% to 70% through addressing feature parity on Cat-M. It expects to have bridged the gaps by the end of June. But a commercial deal would demonstrate progress.

It could be forthcoming in a few weeks. Amin says he has put a huge amount of energy into a single brownfield operator whose identity he could not reveal when he spoke with Light Reading. By July, however, he expects to put up or shut up. "Either brownfield use cases get validated or we become always a small niche business on greenfield," he said.

Greenfield malaise

Symphony's issues are symptomatic of the industry's wariness about open and virtual radio access network (RAN) technology sold by new-look vendors. In traditional networks, operators tend to buy all the products for a given mobile site from a big vendor. Rakuten and others are promoting the ability to combine different suppliers, put RAN software on common, off-the-shelf equipment and run all network and IT workloads in the cloud.

Yet only three companies are investing in open and virtual RAN at a nationwide level – Rakuten in Japan, 1&1 in Germany and Dish Network in the US. None had an existing network, making them greenfield players, and none is doing well. Rakuten, the most advanced, has struggled to attract more than 4.7 million customers in three years, at least partly because its lack of low-band spectrum has resulted in a lousy indoor service.

1&1 has put only 20 sites into use, despite telling regulators it would have 1,000 operational at the end of last year. It blames that on the "obstructiveness" of Vodafone, which owns Vantage Towers, 1&1's mast landlord, but also competes against 1&1 in the German mobile market.

As for Dish, profits have tumbled on its investment in thousands of radio sites to compete against AT&T, T-Mobile and Verizon, the big three existing operators. Reliant on wholesale deals with AT&T and T-Mobile while it builds its own network, Dish has witnessed a drop in customer numbers over the past year. Analysts are increasingly skeptical the project will succeed.

Figure 2: Rakuten Symphony progress on RAN feature development (Source: Rakuten)

There is little sign of much additional greenfield appetite, which exerts more pressure on open RAN suppliers to score brownfield deals. But matching industry giants like Ericsson, Huawei and Nokia on feature parity means spending money. Mavenir, a US software rival to Rakuten Symphony, has just raised $100 million from investors including Siris, its biggest owner, to fund development.

"We started making revenue with low-hanging fruit and now we're reaching a point where this year we'll fill that gap," said Pardeep Kohli, Mavenir's CEO, during a previous interview with Light Reading. "If we can get to feature parity by the end of the year, then we can go and replace a complete site with 2G and 4G and 5G features."

Mavenir appears to have enjoyed more success than Rakuten with brownfield operators. Earlier this year, it landed a deal to supply massive MIMO, an advanced 5G technology, to parts of Deutsche Telekom's European operations. Even more recently, it was chosen to replace existing mobile sites in the network of Virgin Media O2 (VMO2), one of the UK's four mobile operators. But neither of these contracts is likely to entail a massive initial swap.

Slow and single vendor

The operators planning swaps are moving slowly. Vodafone, for instance, has said it aims to use open RAN across 30% of its European network footprint by 2030. This would imply rollout across tens of thousands of sites. But Vodafone's only activity so far appears to be in the UK, where it intends to replace about 2,500 Huawei sites with open RAN technology by the end of 2027 to comply with a government ban on use of the Chinese vendor. So far, Vodafone has put only 14 open RAN sites into commercial service, relying mainly on Samsung.

This raises another issue for the concept – heavy dependence on a single vendor of the technology as opposed to a multitude of suppliers. Open RAN deployments by large US operators such as AT&T and Verizon also seem to mainly involve Samsung. And there is little evidence so far that Samsung's radios will function with another company's RAN software, or vice versa. VMO2 clearly decided open RAN would be easier to roll out initially with a single vendor, picking Mavenir for that job.

Others have blamed the lack of brownfield interest for disappointing results. "Compared to greenfield operators like Rakuten Mobile, brownfield companies tend to be cautious to open RAN deployment," said Atsuo Kawamura, the president of NEC's network services business, during a presentation to investors last September. "They conducted open RAN tests last year and with that result they have gone somewhat cautious." NEC cut its earnings outlook at the same time.

One seasoned industry watcher wonders where greenfield players such as Dish would be if they had entrusted everything to an Ericsson or Nokia instead of prioritizing open RAN. Iliad stormed mobile markets in France and then Italy after putting Nokia in charge of a traditional RAN deployment. Reliance Jio had even greater success in India following its decision to make Samsung its sole supplier of 4G RAN technology. Amid the greenfield malaise, addressing the brownfield issue looks more important than ever.

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— Iain Morris, International Editor, Light Reading