The current maturity of the mobile industry is both an opportunity and a threat to Open RAN.
Open RAN is the separation of software functionality from the underlying hardware. This is called “disaggregation.” It is also the process of defining functional blocks in the network and clearly and precisely specifying the interfaces between those functional blocks. That these subtle changes have the potential to upend the mobile industry may come as a surprise. But most who study such things believe it to be true. I’ve written elsewhere about the potential of Open RAN, and the many blessings it might convey on the industry.
But before we break out the Champaign, we should be a bit more circumspect and evaluate the challenges to Open RAN. What might prevent Open RAN from reaching its potential?
Challenge 1: Remaining open
This is the biggest challenge Open RAN faces.
- OpenRAN has so much potential to improve the industry.
- Open RAN alleviates vendor lock-in.
- Open RAN opens the industry to new players.
- Open RAN reduces TCO.
- Open RAN fosters innovation.
- Open RAN speeds time to market.
The biggest risk Open RAN faces is that openness is unsustainable.
How will the challenge happen? Here is one scenario. An ISV is an Independent Software Vendor. ISVs stand a good chance to succeed in creating Open RAN software. But what happens when one ISV sells products that work on both sides of a given interface?
That question is best illustrated with an example. Imagine a single vendor sells both a CU (Central Unit) and a DU (Distributed Unit), and there is an MNO (Mobile Network Operator) that wants to buy these products. There may be many Open RAN ISVs submitting proposals to the MNO. How will the MNO choose a vendor? Of course, the price will be one consideration. But because the interface between each component is standard, all vendors will be selling essentially the same product. Or will they?
If one vendor sells products that work on both ends of an interface, this vendor can offer additional functionality when their product is used on both ends. Maybe the vendor has a proprietary encryption scheme that lowers the x-haul requirement or a method of deriving extra QoS data, or possibly they can offer higher value-added services. That additional functionality will not be available when each end of the interface is from a different vendor. As soon as an ISV takes this approach, it is no longer „Open” RAN. The open interface will have been enhanced, making it proprietary. You might think the industry will object to this. But the MNO will not object. The MNO will receive the benefit of added functionality. The MNO will be happy to have the added functionality.
The ISV also will not object. The ISV will have increased its sales. All companies everywhere are always under pressure to increase sales. Investors will want the ISV to show revenue growth. Therefore, increasing sales by enhancing an open interface will be hailed as a smart move. Neither the Vendor nor the MNO will care what „the industry” thinks.
Now you can see why it is very hard to sustain openness. How can this scenario be avoided? What do you think?
Challenge 2: Standards Compliance
A big risk to Open RAN is standards compliance. The situation is pretty good right now for Open RAN. There have been many limited trials yielding positive outcomes. Limited commercial deployments are also returning positive results. Operators continue to make friendly noises about the potential. But maybe we’re still in the „On the rise” phase of the Gartner Hype Cycle.
The traditional vendors haven’t done much about Open RAN, except ignore or deny its potential benefits. Maybe the shift from CapEx (Capital Expenditure) to OpEx (Operational Expenditure) will nullify the TCO (Total Cost of Ownership) savings. Or the performance delta with bespoke hardware/software solutions will become insurmountable. Or maybe the lack of formal interoperability testing or compliance certification will crush the dream of truly heterogeneous networks.
Whatever might cause excitement about Open RAN to fade, the traditional vendors seem to be waiting. Some questions that may be posed here are as follows:
- When the potential of Open RAN is shown to be real, what will the traditional vendors do?
- Will they pretend to be Open, to win the deal? Do you think they would play fair with a far smaller rival on the other side of a standard interface? Or would they do all in their power to discredit openness?
- Might they acquire one or more of the biggest Open RAN vendors? If they did, would that be good for Open RAN or not?
- Will the traditional vendors adhere to the same principles that are eroding margins from their historic business model?
- The traditional telecom vendors today are much larger than most of the Open RAN vendors. With resources like that, and with their business models threatened by Open RAN, don’t you think they will do everything they can to stop Open RAN?
Challenge 3: Remaining Independent
Many of the Open RAN vendors today are not large companies. Yes, there are large companies involved in Open RAN, such as Samsung and Fujitsu. Even Mavenir, an early Open RAN success story, is part of a larger company.
But many of the Independent Software Vendors (ISV) in the Open RAN space so far are relatively small. Their interest is the same as the larger players, to take market share and sales from the traditional vendors. It’s very healthy for a market to welcome small entrants. But the traditional vendors are huge by comparison. That size disparity between the traditional vendors and many of the new Open RAN vendors poses a risk to Open RAN.
Imagine one of these small vendors achieving early success with many MNOs. The small vendor presently is privately held. In a potential acquisition, any of the traditional vendors could afford to offer a significant premium over a valuation based on simple financial metrics. In other words, they could make an offer the smaller company simply couldn’t refuse. After acquiring the smaller company and that company’s customers, the traditional vendor might be able to replace the former Open RAN implementation with their traditional solutions.
The MNO might not be in favor of this, but the traditional vendor would be in a very powerful position. And the advantages to the traditional vendor are clear: not only do they acquire a new customer but also eliminate a significant competitor at the same time. Two powerful motives.
I doubt that a strategy like this could totally kill Open RAN. But it might succeed in delaying it for a useful period. That seems important to at least one of the vendors, Ericsson, who has already been saying Open RAN might be important for 6G, which remains many years from deployment.
I can’t imagine exactly how this delay might work to the benefit of the traditional vendors. Maybe give them time to lock in some form of advantage with 6G or other standards efforts? Or maybe simply buy time while they answer the threat from Open RAN. Who knows?
Challenge 4: Innovating too quickly
One of the most important benefits of Open RAN is likely to be a much faster pace of innovation. If functionality can be enhanced simply by upgrading your software, why wait 10 years for the next traditional mobile generation?
But before I describe why that might be a cause for concern, let’s first explore what the opportunity is.
I believe more rapid innovation is one of the biggest benefits of Open RAN. When functionality is 100% defined in software, the next enhancement can be had with the next release upgrade. And with so many new entrants in the Open RAN market, there are bound to be some very hungry, very motivated newcomers. Progress could begin to happen quite quickly. After 5 generations of waiting 10 years or more for the mobile network to catch up with technology, faster innovation will seem like magic! Innovations will stack up against one on the other. Many small changes each will incrementally advance network capabilities. Not only will individual functional blocks improve, but overall, the network will evolve rapidly.
It’s exciting to imagine exactly where that Open RAN will take us. But Open RAN is not evolving in a vacuum. Parallel improvements are happening in computing power, wider adoption of virtualization and containerization, increased distribution of edge compute, regional, and neighborhood data centers. 3GPP Release 17 is coming and work has started on Release 18. Both will add features, enhance capabilities, and add use cases. The growth and availability of LEO (Low Earth Orbit) satellite networks is another wildcard that seems likely to increase mobile penetration and grow the industry.
After 40 years of mobile, development a new normal of ubiquitous wireless service is beginning to take shape. Building and operating the networks providing this service is tremendously satisfying. It’s a terrific time to be working in Telecoms!
RIMEDO Labs Resources
- The O-RAN Whitepaper: Sign up for our newsletter to download: The O-RAN Whitepaper
- Blog posts: Other blog posts regarding the O-RAN: 1. Introduction to O-RAN: Concept and Entities, 2. O-RAN Architecture, Nodes, and Interfaces, 3. near-Real-Time RIC (RAN Intelligent Controller), 4. O-RAN Use Cases: Traffic Steering
- Webinar: A video recording from a webinar discussing the above aspects, and architecture, RIC internals, use cases, with a special focus on traffic steering: O-RAN Architecture and Use Cases – YouTube
- Slides: Sign up for our newsletter to get a free copy of slides on O-RAN Architecture and Use Cases
- Training: Sign up for our O-RAN System Overview Course.
- Poster (High quality, printer-friendly, A3): Subscribe to get your O-RAN Poster copy.
Russell Lundberg has 30+ years of experience working in mobile technology for MNOs around the world, specializing in greenfield buildouts, quality of service, cost-effective operations, 5G, and Open RAN. Presently Russell is Principal at Intelefy LLC, consulting with Mobile Network Operators and others interested in wireless technologies. He also helps Telecom Pros develop their careers through outreach, education, and mentorship. Intelefy has hosted over 10,000 Telecom Pros in our training webinars. At Rimedo Labs, Russell serves as an Advisory Board Member.