Nokia and Ericsson have decided to suspend their technical activity in the O-RAN Alliance, due to the inclusion in the US entity list of three Chinese companies, members of the alliance. The decision of the Nordic companies, in principle temporary until the “current situation” is resolved, adds new doubts to the future development of Open RAN networks that, in any case, are not expected to be commercially available and on a large scale until 2025 as minimum.
The O-RAN Alliance is now facing an extremely complicated situation that is very difficult to resolve: preventing, on the one hand, that other members of the alliance follow the example of the two Nordic companies and, on the other, resolving the situation that has caused Ericsson and Nokia are gone. Two members, in addition, who are the second and third world supplier of link networks (RAN). The leading manufacturer of trunking networks, Huawei, does not form and does not want to be part of the Open RAN Alliance, thus the prospects of the alliance to create a broad open alternative to the current closed RANs is completely up in the air.
The “current situation” referred to by Nokia and Ericsson (the latter withdrew from the O-RAN Alliance two days after Nokia did so in late August) is the decision of the United States Government to put on its blacklist (the Entity List) three Chinese companies that are members of the alliance. They are about Kindroid, a chip developer; Phytium, a supercomputer company; and Inspur, a server manufacturer. The three companies have been accused of working with the Chinese military and are added to the list of 260 other Chinese companies accused of the same, the main of which is Huawei (it is understood that allegedly, because the United States still does not provide any proof of what it says and Huawei vehemently denies the charges against it).
The US government’s decision to blacklist three Chinese members of the O-RAN Alliance has prompted Ericsson and Nokia to leave the alliance.
According to consulting firm Strand Consult, a total of 44 Chinese companies were part of the O-RAN Alliance in December 2020 (three of them from Hong-Kong). The alliance was created in 2018 by Deutsche Telekom, NTT DoCoMo, Orange, AT&T and China Mobile and now has 237 mobile phone operators and telecommunications equipment manufacturers. The United States has 82 members, Taiwan 20, Japan 14, the United Kingdom and India ten each, and Germany seven. Telefónica is also part of the alliance, with representation on the board.
That 20% of the members of the O-RAN Alliance are Chinese companies should not surprise anyone because the alliance was initially the result of the merger of two associations with similar purposes: the US xRAN Forum and the Chinese C-RAN Alliance. In August 2018 it was established as a German entity and since then it has become a global community of mobile operators, equipment manufacturers, academic and research institutions in the radio access network industry, as highlighted on its official site.
Especially in the last year and a half, the alliance has developed and published numerous Open RAN specifications to promote the development of open, unbundled and virtual RANs and to be an alternative to proprietary RANs of current suppliers. At the beginning of the year, the four big European telecommunications operators signed a memorandum to promote the rapid development of global and non-fragmented networks, with an explicit commitment to deploy them in their respective national networks as soon as they become available.
Specifications, not global standards
Despite this intense and laborious task carried out by the O-RAN Alliance in recent years, the alliance does not have any official recognition to develop international standards, in telecommunications networks where appropriate. Instead of developing standards, what it does is “develop technical specifications of link networks (RAN) that are superimposed on the 3GPP telecommunications network standards”, as published by Stand Consulting in a note in which it echoes the Nokia and Ericsson’s exit from the O-RAN Alliance and initially published by the weekly Politico.
And, as the consulting firm clarifies, O-RAN Alliance does not meet any of the transparency and openness requirements established by the World Trade Organization (WTO) in its guide and recommendations. Organizations such as 3GPP, which has developed the 4G and 5G standards, but also IEEE, IETF, ISO, ITU, ESTI, TIA and even the GSMA are fully recognized internationally to develop standards and, in addition, enjoy full immunity by having a general license at the international level, so no government can put its members in a compromise as the United States has now done with three members of the O-RAN Alliance.
Whether the specifications prescribed by the O-RAN Alliance must override the 3GPP standards is a more complex issue than it seems, as many experts have highlighted, because the alliance specifications are based on patents and their use must be accepted by its legitimate owners, apart from the corresponding payment. Patents that, for example, Huawei has and can refuse to assign them, because it is not part of the O-RAN Alliance. Instead, 3GPP can use Huawei’s patents in its standards because the company is part of 3GPP and is obliged to assign its use to third parties by virtue of this.
The O-RAN Alliance should strive to strengthen ties between its members and ensure that they will not be exposed to future retaliation, as the Nordic manufacturers fear.
Apart from this intrinsic problem that O-RAN Alliance has of not being able to create standards and depend on third parties such as 3GPP and owners of essential and non-essential patents, the suspension of the technical activity of Nokia and Ericsson has caused a kind of existential crisis in the bosom of the alliance. The decision of the US government to blacklist three Chinese members of the alliance makes it clear that the O-RAN Alliance is entirely in the hands of the decisions that the US Administration wants to make, in the past and in the future.
You were probably aware of the inconsistency with which the O-RAN Alliance worked, but the inclusion in the Entity List of three of its members has made it totally evident and very dangerous. Ericsson and Nokia have realized that their collaboration with other members of the alliance could cause serious problems if some of the companies with which they collaborate were suddenly blacklisted.
When Huawei and 68 companies not established in the United States were put on the Entity List, the United States Ministry of Commerce approved a temporary license so that American companies could collaborate with Huawei and affiliates if “it was necessary for the development of 5G standards such as part of internationally recognized organizations ”. This license was temporary (has expired and has not been renewed) and specific, applied only to Huawei and other non-members of the O-RAN Alliance, so it could not be applied to Nokia and Ericsson either.
Due to this immense mess, it is logical that the two Nordic companies have wanted to distance themselves until the situation is resolved. In the case of Ericsson at least, it is not a serious setback either, because the collaboration in the development of Open RAN equipment has never excited him, because he considers, from his point of view, that it is to create a new competitor, and a little reluctantly. Now, getting Ericsson back into the fold will be doubly difficult.
As if that were not enough, nothing prevents the Joe Biden government from including new members on its blacklist; In addition, you have many companies to choose from. Nor should the US government worry about being consistent, because it was no longer consistent when it decided to blacklist Huawei and instead exonerate ZTE from it, without the reasons being clear. The government of Donald Trump limited itself to imposing a fine on ZTE, when it does the same as Huawei and has even greater ties with the Government of China. But it would not be strange if, shortly, he also blacklisted ZTE, like the other three Chinese members.
In the case of including China Mobile, the situation could be more surreal. Apart from being the most important mobile phone operator in the world and having clear ties with the Chinese Government and its military because it is a state company, owned by the Government like the other two national operators, China Mobile is a founding member of the O-RAN Alliance, he is on the agency’s board of directors and is a highly influential member of the 3GPP. Suspending China Mobile would mean little less than propitiating the 5G breakdown, as some fear it will eventually happen in a few years.
The expulsion of the Chinese members of the O-RAN Alliance is therefore not an option. A graceful way out of the conflict would be for the Chinese members of the O-RAN Alliance to have a special license from the US Government to collaborate with other members of the alliance, Chinese and non-Chinese, for the development of open, unbundled and virtual RANs, which is what promulgated by Open RAN, and with no time limit. Although some members, such as AT&T, can influence their government to agree to this, this is a remote possibility in the current circumstances of trade conflict between China and the United States. And it would also be necessary to solve the dispute with the specifications, that not standards.
Slow development of Open RAN
The situation of US companies firmly committed to the development of the Open RAN specifications, such as Mavenir or Parallel Wireless, should not be very comfortable with unleashed conflict either, because it is clear that for the Open RAN project to come to fruition it is necessary to the complicity of multiple business and political interests, apart from their mutual collaboration.
Within the framework of the Open RAN Summit, organized virtually by the technology site Fierce Wireless on September 8 and 9, executives from Orange and BT were hopeful about the development of Open RAN, albeit with nuances. Olivier Simon, director of radio innovation at Orange, anticipates that Open RAN networks will be ready for commercial deployment from 2025, although initially they will be placed on private networks or very secondary networks, where the degree of complexity is much lower . Simon concedes that there are already Open RAN solutions now installed, but considers that they are not mature enough to include them in most networks. As of 2025, they will be mature, although not in the most complex cases.
Neil McRae, BT manager, was more cautious than Simon, although he expects Open RAN networks to develop in the second half of this decade. BT, in principle, is not against Open RAN, but first he wants to make sure that they work with full guarantees. From the outset, it is best to test them with private networks, because the environment is much more controlled. Although the conversation took place a week after the announcement by Nokia and Ericsson, no mention is made of the Open RAN situation in the article. Some specialists point out that the full development of Open RAN will take place by 2030.
Executives from Verizon and AT&T showed their enthusiasm for the development of Open RAN at the summit, but without delving into its problems, beyond declaring that the disputes must be resolved before proceeding to its commercial deployment. AT&T vice president of network analytics Raj Savoor said he expects to start Open RAN indoor deployments within about a year. Adam Koeppe, vice president of technology planning at Verizon, said that “in general, there are business, economic and technological challenges inherent in the standardization process” of Open RAN and outlined a long list of challenges to overcome.
In a virtual meeting held last week by the consulting firm Omdia, the list of advantages and disadvantages presented by Open RAN was presented, where the disadvantages are severe. The benefits, such as lower capital and operating costs for operators, will also depend on the number of existing suppliers and the size of the market. The consulting firm predicts that by 2025, virtual and open link networks could represent, as a whole, about 10% of the total market for RAN networks, with a size of 4,000 million dollars. Currently, Omdia calculates, they represent 1.5% of the total, about 600 million dollars.
VENTAJAS E INCONVENIENTES DE OPEN RAN
Source: Omdia, september 2021
Last week, the 5G Event also took place, a meeting held in the United States and aimed at promoting 5G. The political situation and 5G networks and the spectrum shortage in the United States were mainly highlighted and the Open RAN topic was hardly mentioned. AT&T executive Brian Daly shed little light on the future development of Open RAN in a virtual presentation on the subject, limiting himself to saying, among other things, “that a lot of work needs to be done to ensure that O-RAN meets your expectations. “And that its deployment will take place one day, although” it will not involve a transformation from night to day. “