Is Open RAN finally open for busines?
A bit of history and an explanation of Open RAN
In the beginning there was the A-bis interface, a GSM standardised interface that was supposed to enable any vendor’s base station (BTS) to connect to any other vendors base station controller (BSC) and vice versa. Unfortunately, the standard and the real-world implementation didn’t quite align, and all the GSM vendors implemented a semi-proprietary version of A-bis and thus Operators had to purchase their BTS and BSC from the same vendor. The only way of introducing competition was through geographic division of networks to vendors. The same happened in 3G with the IuB interface (Node B to RNC).
This meant less competition at the component level but at least there were several vendors touting their wares including: Nokia, Ericsson, Lucent, Alcatel, NEC, Nortel, Siemens and in the Asian markets Huawei and ZTE.
However, wind forward quite a few years and after considerable network vendor consolidation the competitive marketplace consists of far fewer players. Allied to this, western governments are mandating the removal of Chinese manufacturer’s equipment thus reducing the competition even further in the West.
The saviour for the Operators could be Open RAN (O-RAN), let’s explore what O-RAN is and look at a similar initiative from days gone by.
I must admit a few years ago I was a bit of a cynic when I heard that O-RAN was starting to gather momentum. I recalled initiatives like OBSAI (Open Base Station Architecture Initiative) which was a trade association created by Hyundai, LG Electronics, Nokia, Samsung and ZTE in September 2002. This initiative aimed to open the market on radio base station products by defining a modular structure for base stations, defining the standard modules and the interfaces between them, with a view to being able to mix and match modules from different vendors in the same base station. I was sceptical that this would fly as in effect it would potentially decrease the cost of the equipment that the very same vendors signed up to this initiative were supplying and increase competition between them. Unfortunately for the Operator community (purchasing these products) this initiative didn’t take off and the sight of a multi-vendor base station with modules from different vendors all seamlessly working together never materialised. Maybe the inter-operability was just not achievable or maybe it was being driven by the wrong founders?
O-RAN sits under the O-RAN alliance which was formed a full 16 years later in February 2018 by AT&T, China Mobile, Deutsche Telekom, NTT DOCOMO and Orange – note the lack of vendors in the founding community. O-RAN Alliance’s mission is to “re-shape the RAN industry towards more intelligent, open, virtualised and fully interoperable mobile networks.” Their website quotes three main streams:
- The specification effort => extending RAN standards towards openness and intelligence
- O-RAN Software Community => development of open software for the RAN (in cooperation with the Linux Foundation)
- Testing and integration effort => supporting O-RAN member companies in testing and integration of their O-RAN implementations
What the O-RAN initiative has done is effectively created the concept of three main building blocks:
- the Radio Unit (RU)
- the Distributed Unit (DU)
- the Centralised Unit (CU)defined
The RU is where the radio frequency signals are transmitted, received, amplified, and digitized. The RU is located near, or integrated into, the antenna. The DU and CU are the computation parts of the base station, sending the digitalised radio signal into the network. The DU is physically located at or near the RU whereas the CU can be located nearer the Core.
O-RAN is “opening” the protocols and interfaces between these various building blocks (radios, hardware and software) in the RAN with 11 different interfaces defined including those for:
- Fronthaul between the Radio Unit and the Distributed Unit
- Midhaul between the Distributed Unit and the Centralised Unit
- Backhaul connecting the RAN to the Core
This all sounds very similar to OBSAI – standard modules or building blocks with standardised interfaces between them.
The O-RAN Alliance now has a real cross section of members, alliance contributors and academic contributors including Operators, tier 1 consultants, equipment vendors, IT software providers, IT hardware vendors, universities, and cyber security centres to name but a few – this initiative has a lot of weight behind it.
So how is O-RAN doing?
Vodafone announced an O-RAN deployment plan for the UK in June 2021 year – their selected vendors are: Dell, NEC, Samsung Electronics, Wind River, Capgemini Engineering and Keysight Technologies (interesting that none of the big four Radio Access Network (RAN) vendors feature here) – they will jointly deliver the first commercial deployment of Open Radio Access Network in Europe (1) Vodafone’s initial focus will be on the 2,500 sites in the UK that it committed to O-RAN in October 2020. It is reportedly one of the largest deployments in the world to date.
This followed another Vodafone announcement in April 2021 regarding the launch of an O-RAN Test and Validation Lab on its Newbury campus to support the developing O-RAN ecosystem for the telecommunications industry. (2)
One headline that grabbed my attention in October last year (partly because of the grammar I have to say) was “Telefónica CTO Predicts Open RAN ‘Massification’ by 2025” (3)
Enrique Blanco, CTO at Telefónica, stated that within four years, “if everything is going well, up to 60%, 70% of the total deployment of radios will be done with this architecture,” “We cannot be sitting and waiting. This is not an option. We need to move very fast in trying to change the architecture because it is simple, faster, better, and finally, this is not our main target, cheaper,” he said.
In November the next O-RAN headline I noticed was “Orange unveils its very own Open RAN lab” (4)
“With the creation of an Open RAN Integration Centre, open to our partners worldwide, we want to accelerate the development of an open, intelligent, cloud-based RAN and create a rich Open RAN ecosystem in Europe,” said Michaël Trabbia, Chief Technology and Innovation Officer at Orange. “From 2025 onwards, our ambition is to deploy only Open RAN equipment across Europe.”
Another advocate of 2025 being the year that O-RAN comes of age…..
Also in November 2021 Deutsche Telekom, Orange, Telefonica, Telecom Italia and Vodafone Group pressed for regulatory adoption of five recommendations pulled from a wider Analysys Mason report Building an open RAN ecosystem for Europe to stimulate the open RAN sector to ensure Europe does not lag North America and Asia in the 5G era and beyond. (5)
Talking about regulatory / governmental ambitions another interesting development in December 2021 was the announcement from the UK Government as follows:
“The Government is today announcing, together with UK mobile network operators, a joint ambition for 35% of the UK’s mobile network traffic to be carried over open and interoperable Radio Access Network (RAN) architectures by 2030.
Open network architectures will play a key role in enhancing the security and resilience of the networks that we rely on – now more than ever – to keep in touch and do business. Following recent decisions the Government has made around the use of high-risk vendors and the introduction of the Telecommunications Security Act, it is right that the Government now sets out its ambitions to build a more competitive, innovative, and diverse supply base for telecoms.” (6)
Interesting that security was at the forefront of their thinking here, but there is also a recognition that the government decisions on Chinese vendors in UK networks has reduced vendor competition. 2030 is a long way off but this is yet more evidence of the building support for O-RAN.
What about the outlook elsewhere?
In December 2021 Heavy Reading produced a white paper for QCT and Intel: “The Outlook for Open vRAN Deployment” this was based upon a survey of operators asking key questions on deployment status and plans.
The first question in the survey asked mobile operators about the status of O-RAN deployments in their company’s commercial macro network:
- 18% are deploying now
- 30% believe they will deploy within one year
- 51% believe they will deploy within two years
- 1% are still investigating.
This looks very rosy for O-RAN but bear in mind that this finding does not indicate anything about the scale of the deployments.
Another question looking at reasons why operators want to deploy O-RAN gave the following responses:
- 25% for faster and greater control of feature development
- 21% to increase vendor diversity
- 20% for new service and monetisation opportunities
- 15% to improve coverage in new and/or marginal geographies
- 13% due to government mandate (I assume this is associated with removal of Chinese vendors in some territories)
- 6% for cost saving
This makes interesting reading with cost saving being at the bottom of the pile (aligning to the view of Enrique Blanco at Telefonica) although I am not aware of which communities were polled in the operators, I’m sure the CFO would put this top of the list.
What does all of this do to my cynicism and scepticism?
Well, I personally see a massive difference between the failure of OBSAI and the momentum that is building behind O-RAN. There is no doubt the O-RAN alliance is not just a small gathering of techno geeks pushing a standard or a bunch of hopeful small vendors trying to push their products. O-RAN has become mainstream, just look at Ericsson and Nokia publicising the benefits of O-RAN on their websites. An interesting point was made by Nokia last year by Jane Rygaard, head of dedicated wireless networks and edge clouds, arguing “it will take another year or two to determine which companies will last the pace in developing and rolling out open RAN” while warning about the risk of the technology becoming too fragmented.(7)
Once this alleged shake out has happened will this mean the traditional big players succeed in continuing to dominate the RAN equipment space or will we finally see new challengers rising to the surface and eating some of Nokia, Ericsson, Huawei and ZTEs pie? The Vodafone trial certainly hints at a move away from the big four.
Traditionally the vendors have dominated the standards setting for new mobile network technologies (e.g. 3GPP) and thus been able to design standards that meet their needs and enable them to continue to sell premium products in a fairly closed competitive space. Will the formation of the O-RAN Alliance by a set of Operators back in 2018 finally turn the tables on the vendors and allow the Operators to open up the RAN equipment competitive space?
Personally, I think yes, but I suspect the initial flurry of new O-RAN vendors will eventually lead to consolidation down to those with the largest share of contracts and may even lead to the big four buying them out and closing the market off again.
What does this mean for customers, will ORAN bring new services or speed up the delivery of existing services?
According to the ORAN Alliance website “O-RAN standards enable a more competitive and vibrant RAN supplier ecosystem with faster innovation” and “O-RAN based mobile networks improve the efficiency of RAN deployments and operations”Does this mean that innovation in radio networks will speed up to the extent that new features and functionality will enable new services for end users ahead of when they would have otherwise been available? – This is a complex issue as new features and functionality rely on devices (from the mighty Apple and Samsung’s of this world) also being capable and available to support them, if only a small number of O-RAN vendors are pushing these giants to support these features will they get any traction? However, a system which is more affordable and efficient to roll out may mean that areas that currently do not benefit from the most up to date radio network technology may become more affordable to deploy to; for example, rural areas. Coincidentally Vodafone’s UK deployment is to extend 4G and 5G coverage to more rural places across the South West of England and most of Wales, moving into urban areas in a later phase. This potentially means rural customers getting access to 4G and 5G services earlier or where they would not have received them previously.
So, is Open RAN finally open for business?
I believe it is albeit at a fledgling stage, OBSAI never really got to the kind of deployment level we are starting to see with the likes of the Vodafone trial and the support and momentum appear to be building more and more across the industry and even in government (in the UK) however, it is still a matter of time to see how the industry shakes out and whether it continues to encourage and support a diverse range of contributors and new vendors in a more open and competitive environment.
If you are considering O-RAN procurement or deployment in your network then get in touch with our team of highly experienced consultants with many years of specifying, procuring, and deploying new technologies.