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Ignore politics of whitebox radio: Mix and match OpenRAN tech will be 10% of market in 2025, claims analyst

Critics say the post-Huawei world of telco networking increases complexity but it has legs

Analysts are upping sales projections for Open RAN tech despite the recent kerfuffle that saw Nokia step out of an industry alliance intended to heighten competition in telco networking.

The Alliance itself said yesterday that it remains "fully committed to its mission of delivering open, intelligent, virtualized and fully interoperable RAN."

The whitebox radio tech is increasingly being promoted as an answer by politicians insisting that partial and effective bans on Huawei – for many years the biggest head-to-toes mobile radio comms kit vendor – will create market competition issues.

Huawei's removal in multiple countries, including the UK, has opened doors for Nokia and Ericsson – the other two of the Big Three telco networking kit makers. The problem then is that operators are potentially left with a duopoly delivering closed systems. The mix-and-match Open RAN technology is supposed to solve this problem and open the market to smaller players who perhaps wouldn't be able to manufacture devices across the breadth of the sort of portfolio that Huawei and co do.

Critics have said that vendor-held software patents may delay the whole Open RAN concept, while others have complained that open interfaces and cross-vendor interoperability increases the attack surface for security threats - and increases the possibility that any one of the vendors' interoperable kit might fall over, leaving the carrier in a pickle finding out whose it was. In Britain, DCMS is currently testing OpenRAN security and resiliency in special hubs to make sure it works with 5G infrastructure.

Telco analyst at PP Foresight, Paolo Pescatore, said of OpenRAN: "The growing support for this nascent technology cannot be ignored, which is vital for the future success of 5G and other networks down the road.

"It is important to foster an open, collaborative ecosystem of partners which will help encourage other vendors to enter the market. There is currently a distinct lack of vendors which is dominated by a handful of players.

"Flexibility stands out as one of the principle benefits of Open RAN. Allow[ing] telcos to mix and match network vendors ... helps avoid vendor lock-ins and cost savings. Telcos are striving to be more efficient given that margins are being squeezed and the financial challenges that all are facing."

Sounding a note of caution, he continued: "In reality it is early days, unproven and the road ahead is a long one and most likely bumpy as this form of integration is no easy feat. More and through testing needs to be carried out. Telcos like Vodafone are in prime position given the early moves to test Open RAN."

He also maintained that it should not be seen as "the sole answer as a replacement for Huawei as there are other network providers. While there are other network vendors who could pick up the pieces, they currently enjoy a dominant position due to the current market dynamics. The industry very much needs a resurgence of players like Samsung Networks and Japanese players Fujitsu, NEC. Smaller, fast growing and niche solution providers like Mavenir will all be keen to secure new business."

Mavenir is among the OpenRAN vendors with which Vodafone is working in the UK. Voda has been trialling the white box radio tech for a while now.

This time last year, execs from BT and Vodafone warned UK lawmakers that a deadline of 2023 to remove Huawei-made equipment from their networks would result in "multi-day mobile signal losses" for some customers.

In February, analysts at the Dell'Oro Group predicted that worldwide Open RAN revenues were set to hit double-digit rates with cumulative spending on Open RAN kit and caboodle – including hardware, software, and firmware (excluding services) – expected to near $10bn between 2020 and 2025.

A little over six months later and Dell'Oro Group has now revised its initial findings upwards, forecasting that revenues are projected to hit between $10bn and $15bn by 2025.

To put that in context, however, last month market watcher Gartner forecast worldwide 5G infrastructure revenue (excluding mobile core) at $40.64bn for this year alone.

In an update, Dell Oro reckons that strong demand across the spectrum in a number of areas – especially in Asia and the US - are expected to add up to more than 10 per cent of the overall RAN market by 2025.

The bullish predictions also extend to Open RAN Massive MIMO projection thanks to the "improved competitive landscape and the improved market sentiment with upper mid-band Open RAN."

That said, analysts reckon the shift towards 3GPP-based Virtualized RAN (V-RAN) is progressing at a slightly slower pace than Open RAN, with V-RAN revenues expected to near $2bn to $3bn by 2025.

A virtualized RAN environment is typical for 5G, with the increasingly evolving spec requiring more and more processing oomph. It also allows for easier remote maintenance, scalability and lets the telco remotely deploy new software services without putting an engineer on-site.

"The momentum with both commercial deployments and the broader Open RAN movement continued to improve during [the first half of 2021], bolstering the thesis that Open RAN is here to stay," said Stefan Pongratz, VP and analyst with the Dell'Oro Group.

Asked to shed more light on what prompted this latest revision, Pongratz told us: "Regarding the regional and technological splits, we are expecting the APAC region to dominate throughout the forecast period and the upward revision was largely driven by the improved market sentiment in APAC and the US.

"From a technology point of view, 4T4R [four transmit and four receive antennas] macro deployments are expected to drive the lion's share. At the same time, we are more upbeat now about the [Massive MIMO ] potential."

He also explained how the group had adjusted the Massive MIMO projections upward to "reflect the improved competitive landscape, with multiple smaller non-top 5 RAN suppliers — including Airspan, Fujitsu, Mavenir, and NEC — announcing the availability or upcoming GA of O-RAN Massive MIMO antenna systems."

Earlier this month Nokia confirmed it had called a technical timeout from the O-RAN Alliance – one of the standards bodies (although not the only one) developed to help push open RAN – amid "compliance-related" concerns linked to Chinese companies on the US government's "Entity List," which fingers organisations the country claims pose a threat to America's security.

Ericsson was also mindful of geopolitical matters, adding that while the “current situation may hamper progress within the O-RAN Alliance” it was “keen to see the situation resolved as quickly as possible."

A research note from a telecoms analyst at Strand Consulting pointed out that the number of Chinese companies involved in the trade group could prove problematic. As always, when vendors works together, things rapidly turn political.

"Given that Chinese state-owned companies comprise more than one-fifth of the membership of the O-RAN Alliance, it is essentially impossible to limit Chinese government influence in the organization," said Strand Consulting. "If anything, more companies will likely follow in Nokia's footsteps to pause, if not end, their membership in groups like the O-RAN Alliance.”

As for the Alliance, it said yesterday it:

became aware of concerns regarding some participants that may be subject to U.S. export regulations, and has been working with O-RAN participants to address these concerns. The O-RAN Board has approved changes to O-RAN participation documents and procedures. While it is up to each O-RAN participant to make their own evaluation of these changes, O-RAN is optimistic that the changes will address the concerns and facilitate O-RAN’s mission.

"We remain fully committed to working together in the alliance to achieve the goals and objectives of O-RAN as quickly as possible," said Alex Jinsung Choi, chief operating officer of the O-RAN Alliance and SVP of Strategy and Technology Innovation, Deutsche Telekom, in a statement.

Asked whether the nervousness in the O-RAN Alliance was a concern, Pongratz told us: "When it comes to suppliers pausing their O-RAN contributions, our take is that the Open RAN momentum is broad-based at this juncture and operators will continue to demand more open interfaces going forward."

Pescatore commented: "The current situation at the O-RAN alliance is worrying. This remains a major obstacle in its relatively short history. More so in light of growing tensions between the east and west, the need to collaborate and bring products to market efficiently. Already the swap out of Huawei kit for telcos represents a huge setback in terms of cost and time." ®

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