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Colin Thomson: OpenRAN Goes Mainstream

Written by Colin Thomson, Access Partnership

Geopolitics  is  poised  to  provide  a  boost  to  the  quiet  quest  of  opening telecom interfaces to the mainstream in 2021. Eclipsing even the previous policymaker preoccupation of winning the “5G race”, the question of who builds 5G and even how it is built looks set to dominate debates on digital infrastructure for the next 12 months.

The “West” – largely Five Eyes countries led by the US and UK and, separately, the European Union – is trying to engineer a new global telecoms market and  challenge  the  dominance  of  Huawei  while  avoiding  a  duopoly  of Ericsson and Nokia.

Opening the Network

Mobile networks support billions of connections generating   hundreds   of   billions   in   service provider    revenues    annually.    These    two characteristics establish mobile networks as some  of  the  most  important  distributed network infrastructure in the world.

The  radio  access  network  (RAN),  the Mobile networks are some of the most important distributed network infrastructure in the world infrastructure connecting your phone to the network, is a huge market but one  dominated  by  just  three  players:  Huawei,  Nokia  and  Ericsson.  They collectively represent 80% of the global market.

Mobile network operators who purchase this infrastructure have identified an opportunity to rebalance the market towards open components, giving them greater flexibility and lowering costs by using commodity hardware. They, along with select vendors, SMEs, investors and academia, are seeking to  put  forward  an  open  network,  OpenRAN,  which  will  develop  radio networks  on  a  software-centric  open  network,  disaggregating  hardware components and software components. Bodies such as the O-RAN Alliance and Telecom Infra Project are now delivering standards-based technology solutions, specifications and trials. Rakuten in Japan and Dish in the US are also driving OpenRAN deployments.

Why Now?

The  fillip  for  OpenRAN  is  geopolitical  and  commercial.  Tensions  between Washington and Beijing have crystallised around 5G.   Already considered strategic infrastructure, the Covid-19 pandemic has made this paramount for Washington, which has pursued an aggressive strategy of sanctions and diplomatic pressure.

Washington’s  sanctions  against  Huawei  caused  ripple  effects  in  several jurisdictions, in particular the UK and EU countries.   The EU, driven by its own “technological sovereignty” agenda, sees a need to preserve European leadership  in  5G  and  beyond,  or  be  overtaken  by  Chinese  and  American firms.  With the US, UK, France, Belgium, Spain and Germany taking action to  limit  or  remove  Huawei,  policymakers  are  reluctant  to  rely  on  just two firms.   With most banking on digital infrastructure to underpin their Covid-19 recovery plans, they perceive too great a strategic risk to rely on foreign firms.

Access  to  OpenRAN  technology  provides  a  vehicle  for  mobile  network operators  to  address  the  supply  chain  security  concerns  brought  about by heightened trade and security tensions, as well as a chance to develop national  telecom  champions  after  a  decade  of  consolidation.   OpenRAN is  already  being  specified  in  mobile  operators’  RFPs  for  new  network equipment but more work needs to be done to meet the needs of vendors and governments, and policymakers are willing to put their money where their mouths are.

Commercially, OpenRAN offers a chance to reduce the costs of complying with   Universal   Service   conditions.   A   common   obligation   in   mobile operators’ service licences, Universal Service requires high-cost equipment to be deployed in low-return areas (in return for exclusive use of natural resources).  Operators are now leveraging OpenRAN as a cost-effective way to deliver service. By migrating legacy 2G, 3G and 4G networks to OpenRAN architectures,  operators  are  able  to  reduce  the  cost  and  complexity  of meeting their Universal Service obligations in these areas.

OpenRAN Roll-Out

Having proven the OpenRAN technology with select deployments in their 2G,  3G  and  4G  networks,  mobile  network  operators  are  now  leveraging the  technology  in  their  roll-out  of  5G.  This  trend  will  increase  operators’ buying power, drive competition and result in cost-effective business-driven solutions to the challenges faced by operators and their clients.

This  will  be  supported  by  taxpayers  worldwide.  The  EU  is  looking  for ways  to  support  telecom  innovation  with  funds  from  the  EUR  1.8  billion Connecting  Europe  Facility  Digital  programme,  the  EUR  6.7  billion  Digital Europe  programme  and  the  EUR  95.5  billion  Horizon  Europe  programme (USD 130 billion in aggregate), not to mention Member States’ individual initiatives.  The  US  congress  has  passed  a  bill,  awaiting  the  outgoing president’s  consideration,  to  establish  a  fund  for  telecom  innovation  and “rip and replace”, but exactly how much will be allocated is unclear at the time of writing.

The UK has allocated an “initial” GBP 250 million (USD 340 million) toward its  5G  Supply  Chain  Diversification  Strategy  and  is  likely  to  use  its  2021 presidency of the G7 to drive this approach internationally. The  next  12  months  will  be  when  these  headline  commitments  start  to become concrete actions. For those countries, it is the year when they find out if they can still move world markets.