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Open RAN standards progress, albeit slower than anticipated

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The Open RAN specifications, initiated five years ago by TIP, have progressed lately, albeit considerably slower than originally anticipated. Numerous obstacles hold back their development and their integration with existing networks, due in part to the excessive expectations of the operators and development companies that have promoted them. Rakuten’s recent announcement that it has acquired Altiostar Networks, one of the leading developers of virtualized Open RAN software already used by the Japanese operator, may accelerate the widespread deployment of open networks by the middle of this decade, although this will require prior more realistic and unifying goals with existing 4G and 5G networks.

 

One of the problems when talking about open link networks (with the terms Open RAN, O-RAN, open RAN or other similar ones) is that it is a very generic concept, which gives rise to different interpretations that, in practice, lead to very different technical solutions and characteristics and not necessarily totally unified telecommunications networks. As Stefan Pongratz, senior director of the consultancy Dell’Oro Group, says, “not all Open RANs are the same” and it is necessary to start differentiating the different “flavors” of open link networks, now that the Open RAN market is starting to take off.

 

For Pongratz, the vision of Open RAN in the long term is based on three main axes, which include open interfaces, virtualized technologies and the deployments of multiple neutral equipment manufacturers, in the sense of interchangeable regardless of the manufacturer that has them. done. Apart from moving the industry towards open and interoperable interfaces, the Open RAN roadmap should maximize the use of standardized hardware (without distinction of brand) and minimize proprietary hardware, as proposed by the O-RAN Alliance, adds the director of the consultancy firm specializing in the market for link networks Dell’Oro.

The technological development of open link networks and the implementation of several pilot projects has been important, especially in the last year and a half, but there are many obstacles to overcome

Within each of these three main axes there must be various degrees of compliance with the regulations, in order to achieve full interconnection and compatibility of the networks. Multi-vendor deployments are often associated with the mixing and matching of various baseband and radio spectrum vendors, Pongratz notes. And when Mavenir, one of the promoters of Open RAN, advocates the introduction of the term “true Open RAN” it means that all components must work and work perfectly with those of any other manufacturer. In addition, adds the executive of Dell’Oro, if someone introduces a baseband, they must be able to integrate it with their software and, vice versa, if “another supplier contributes a true Open RAN software, they must make it work with their massive MIMO radios”.

 

As if the subject was not complex enough, there must be enough room for maneuver so that other functional blocks can function properly, since multiple compatible Open RAN radios are proliferating at the moment. This proliferation and need for compatibility at different levels makes it difficult for Open RAN networks to function with guarantees and in a consistent way with the complex telecommunications networks managed by large operators and with the degree of security and privacy that will be increasingly demanded of them. . To introduce more complexity to the landscape, Pongratz adds that although virtual link networks (vRANs) were not part of the initial Open RAN specifications nor are they mutually exclusive, he considers that they are an important element in the long-term vision of networks. open links.

 

It is not surprising, with all these conditions, that Dell’Oro now estimates that the turnover of the Open RAN networks will be of the order of 10% of the total turnover of the link networks in 2025, compared to less than one percent for the year last. This is a preliminary estimate that includes, within Open RAN, all compatible large and small radio stations and takes into account the increase in sales of Open RAN equipment that has occurred in the first semester in the estimates by 2025.

 

It is evident that, in the second half of this decade, the sales of Open RAN networks will represent a higher percentage, which Dell’Oro does not quantify and which, probably, would be highly speculative, due to the many unknowns that loom in the market of link networks and the role that “open” and virtual link networks will play.

Obstacles to Open RAN deployment

The GSMA, the global association of operators, published a report last June in which it recognized “the significant obstacles that operators face in deploying Open RAN solutions.” Open link networks are a widely debated topic and one that has always been in the limelight for the past five years, ever since it was launched by the Telecom Infra Project (TIP) under the initial auspices of Facebook.

 

In short, maintains the GSMA Intelligence report, an initiative of this category must be given time to develop and not get too nervous if progress is slow but, at the same time, telecommunications operators should consider, in a rigorous, the challenges they face when considering whether or not to integrate “open” link networks into their telecommunications networks.

 

In a survey carried out this year by the GSMA of more than one hundred operators around the world to find out the main obstacles they face when deploying open networks in their own traditional networks, the most important, with 28% of The answers is the uncertain return on investment (ROI) of open networks. This high percentage is considered understandable, due to the disaggregated nature of Open RANs, which makes their profitability and costs much more difficult to assess than traditional, more predictable networks (although the future role of Huawei and other Chinese suppliers in the Western networks and traditional Western suppliers on Asian networks are completely on the air and they need each other, even though it is not mentioned in the GSMA report).

Dell’Oro estimates that the billing of Open RAN networks, in their multiple versions, will be of the order of 10% of the total billing of the link networks in 2025, compared to less than one percent last year.

The uncertain return on investment in open networks is just one of the obstacles on the way to open networks. The inexperience and scarce knowledge of the operators when integrating and evaluating alternative networks is also noteworthy, 20%, followed at a very short distance by the limited number of alternatives and existing suppliers and the very small size compared to traditional suppliers (Huawei, Ericsson and Nokia, but also fans like Samsung, ZTE or the Japanese NTT and Fujitsu, more inclined to a hybrid offer).

 

The commitment on August 4 of the Japanese operator Rakuten to acquire the American company Altiostar Networks, for an amount not made public but its assets valued at 1,000 million dollars and in which other investors such as Telefónica, Cisco or Qualcomm already participated, apart of Rakuten’s US subsidiary, can give more wings to the Open RAN initiative, especially since Rakuten already uses Altiostar’s open software and networking features on its mobile communications platform and on the company’s 4G and now 5G mobile network. in various areas of Japan.

 

Rakuten Mobile’s operating losses in the first half of this year amounted to $ 900 million, eating away the profits of other Rakuten divisions and creating uncertainty in Rakuten’s mobile phone project. The lead author of the GSMA report on Open RAN hurdles and head of GSMA Intelligence, Peter Jarich, noted in the statement on the Altiotar purchase that this company “differs from other Open RAN suppliers in its very specific focus on the software ”and highlighted that Rakuten knows Altiostar very well because it uses its software, from which it can be deduced that it has complete confidence in the profitability of the investment made.

The integration of open networks, whatever their nature and final specifications, is another of the great doubts raised by the operators surveyed, practically at the same level as the previous ones, as well as the scarce maturity of the technology, despite the advances that have been achieved, mainly in the last two years, and the merits that are justly attributed to the initiative. In short, the GSMA report states, many operators consider that they are being asked to integrate open networks into their networks without it being clear how they will affect the additional billing or cost savings that they will have during the period of validity of these networks open.

Implications for operators and suppliers

In the second section of the report, dedicated to the implications when integrating an open network in the future, operators are advised to be realistic about the expectations that open networks may generate and to take into account both technology and its impact on the operators business, as well as being cautious and continuing to use traditional (closed) alternatives for the most part, at least until Open RAN solutions are fully established and successfully tested in different environments and contexts. The most problematic thing, it is thought, will be to make them work in the networks of the large operators, precisely because they are so complex. For this reason, Open RAN tests are now done in very limited and concrete environments, mostly rural.

 

To providers of open networks, the GSMA report suggests that their future approach be balanced, so that open networks work within traditional solutions and architectures, because pretending that an operator works only with open networks is considered a pipe dream. They must also be realistic suppliers and not create false expectations for operators. It is, without saying it explicitly, a long-distance race, which will require significant financial, regulatory and political support and support and confidence in the new technology. Again, the conflict between technology between the United States and China, like Europe in the middle, does not exactly help to create complicities. The security of communications, whether with closed or open networks, is another indisputable requirement and it is clear that it is much more difficult to achieve with open networks than closed ones.

 

In presenting the results of the second quarter in mid-July, Ericsson’s CEO, Börje Ekholm, was more favorable to supporting Open RAN networks with his equipment than before, although he considers that in 5G networks open systems and disaggregated will have a very limited role. It will be in the next 6G networks, planned for the next decade, when they will have a more prominent impact. Ekholm had always considered, in previous interventions (which the pandemic has made them accessible because they are recorded and written) that the impact of open networks will be very limited until at least 2023.

 

Ericsson has also always stated that when Open RAN networks are fully developed and fully reliable and secure, the Swedish company will be among the first to offer them to operators. Meanwhile, it offers as an alternative to operators who want a more open environment a complete portfolio of solutions that it calls Cloud RAN, which is not exactly the same as what the providers of Open RAN solutions promote in its different modalities.

 

Nokia, another of the large traditional RAN equipment providers, also has a certain offering of relatively open cloud-based solutions, while Korea’s Samsung is creating a powerful offering of relatively open and highly virtualized solutions. Japanese companies such as NTT DoCoMo, Fujitsu and others are in a similar vein as Samsung, with a view to penetrating the European and US market.

 

Meanwhile, Huawei maintains a clamorous silence, waiting for the issue to evolve, but remember that it has an immense portfolio of 4G and 5G patents that require their explicit acceptance so that the Open RAN Alliance can use them in commercial networks, because Huawei it is not part of the alliance. All the above considerations predict that the Open RAN topic will give a lot to talk about and will gradually progress its implementation in the coming years, to be relevant towards the end of this decade. The amount of this relevance and the cost savings and greater supply that it will entail, because that is what it is all about, continues to be a great unknown.