Some estimates put the telecom industry, especially the RAN segment, between seven to ten years behind a normal innovation curve due to the lack of competition in the market. This is a similar situation to the state of the data center industry in the 1990s, during the dot-com boom, and before companies like VMWare and Intel rapidly turned the market upside down. The data center industry - and most enterprise businesses for that matter - saw the value of a software-centric approach and transitioned to more open models, with competing software vendors fostering innovation. And now, the telecom industry is going through the same dramatic change that the data centers went through in the 2000s, all driven by Moore’s Law.
Vodafone, the leading innovator in Open RAN, recently noted “the global supply of telecom network equipment has become concentrated in a small handful of companies over the past few years. More choice of suppliers will safeguard the delivery of services to all mobile customers, increase flexibility and innovation and, crucially, can help address some of the cost challenges that are holding back the delivery of internet services to rural communities and remote places across the world.”
Vodafone added the move will improve “supply chain resilience,” introducing “a wave of new 2G, 3G, 4G and 5G technology vendors, in addition to the existing market leaders.” This is what Open RAN movement is planning on achieving.
Let us review the timeline of Open RAN in the industry.
2016
The Telecom Infra Project (TIP) was formed in early 2016 (hard to believe that it was only 4 years ago!) as MNOs were frustrated with a lack of innovation in a highly concentrated/closed ecosystem and high costs in the telecom equipment sector. TIP has brought together operators, traditional equipment vendors and startups that are using open source technologies and open approaches. TIP project groups are divided into three strategic networks areas that collectively make up an end-to-end wireless network: Access, Transport, and Core and Services. By dividing a network into these areas, TIP members can best identify where innovation is most needed and work to build the right products.
Source: TIP
TIP is jointly steered by its group of founding MNOs and vendors, which form its board of directors, and is currently chaired by Vodafone's Head of Network Strategy and Architecture, Yago Tenorio. Vodafone has been leading efforts within TIP’s OpenRAN initiative since 2016 with three main goals: 1. to spur innovation through building an ecosystem, 2. to enable supplier diversity and, 3. to reduce deployment and maintenance costs.
TIP is working closely with mobile operators to accelerate innovation, new technology and business approaches to help the industry build the networks of the future. Through this program, Facebook is working with operators in areas that have not been covered with any kind of communication services in various geographies, such as Latin America and some parts of Europe. The cost attractions of Open RAN enabled by interoperability could prove important in such diversified markets from high-income to low-income markets.
There are over 70+ mobile operator members now in the TIP membership roster. With more than 500 participating member organizations, including operators, vendors, developers, integrators, startups and other entities that participate in various TIP project groups, TIP adopts transparency of process and collaboration in the development of new technologies. TIP supports low cost and more competition. They launched PlugFests to accelerate interoperability between vendors, to create a tangible ecosystem and to encourage trials and deployments.
2017
The first OpenRAN trials started in India and Latin America. It is not a surprise that Open RAN started in rural areas, as that is the most challenging market for MNOs and vendors to address - the user penetration is low, the ARPU is low, and the site and backhaul infrastructure is non-existent. With an ALL G OpenRAN solution, MNOs can address cost and deployment challenges of rural markets globally. Minimizing CAPEX/OPEX is important in these low-density areas where there is high uncertainty regarding return on investment. High operational cost and deployment complexity of low-density deployments have prevented MNOs from bringing coverage to those areas in the past. Traditional 2G voice-only and broadband 3G or 4G networks require high-cost and often bulky equipment to deploy and operate. These types of equipment need large spaces to store, have a short life cycle and consume energy. Hardware-based networks are also difficult to upgrade. By shifting networks to virtual Open RAN architectures, telecom operators can overcome all these problems and deliver coverage at a much lower cost.
2018
February: The O-RAN Alliance was formed. It’s is a worldwide, carrier-led effort to drive new levels of openness in the radio access network of next-generation wireless systems by creating standards for interoperability - one of the most important being the 7.2 functional split between RU and DU which standardized the use of 3rd party radios. The alliance was formed as a result of a merger of C-RAN Alliance and xRAN Alliance. O-RAN Alliance’s original founding operator members were AT&T, China Mobile, Deutsche Telekom, NTT DOCOMO and Orange, but since then many other operators have joined. As in case of TIP groups, the O-RAN Alliance has its own set of working groups.
Source: Keysight
While 3GPP defines the new flexible standards (Release 16 was just finalized on July 3rd) separating the user and control plane and keeping the different implementation options open, the O-RAN Alliance specifies reference designs consisting of virtualized network elements using open and standardized interfaces and calls for more intelligence in the network with the help of information collection from these virtualized network elements. Recently, O-RAN Alliance introduced a virtual exhibition where 38 Open RAN ecosystem partners demonstrate their innovations.
TIP is not writing specs like O-RAN Alliance, but rather TIP is promoting, educating and deploying OpenRAN globally, starting in LATAM in 2016, then with Vodafone in Asia, Europe and DRC and more in Asia with Indosat Ooredoo, Smartfren, ad Axiata and most recently with TIM in Brazil.
February: At MWC 2018, Telefónica announced “Internet para Todos,” a collaborative project to connect the unconnected in LATAM. The initiative is aimed at connecting the more than 100 million people in LATAM who currently have no internet access. Telefónica expanded its collaboration with multiple stakeholders: rural operators, technology firms and regulators. With "Internet para Todos," Telefónica is expanding connectivity with an ecosystem approach, incorporating a broad range of partners and stakeholders to solve the rural connectivity challenge.
June: Vodafone and Telefónica announced a joint RFI to evaluate Open RAN technologies that are software-based and that run on top of commoditized hardware.
October: At TIP Summit 2018, Telefónica and Vodafone announced the vendors they are using in their Open RAN pilot deployments. Telefónica and Vodafone sought an Open RAN platform that could provide 2G, 3G, and 4G in addition to 5G. Both operators were aligned on the need to scale these solutions in their rural footprint first as one of the levers for success. The effort in TIP was done to push the sustainable growth of the Open RAN technology driving the industry toward a new generation of open solutions.
Vodafone and Telefónica expressed the importance of disaggregating hardware and software to make networks open, easy and cost-effective to deploy and maintain.
Summary
Global MNOs are realizing the economic benefits of open architecture. They are setting up teams and focusing on innovation and engagements in Open RAN architecture. While earlier they used to buy hardware and software together from a particular supplier, they are now splitting the orders for hardware and software. This will result in significant CAPEX and OPEX realizations, competency and faster deployments.
As we can see, contrary to the information being published by legacy RAN vendors, Open RAN is becoming real; Open RAN has been deployed in commercial networks today; the Open RAN community is thriving; the cost savings are being realized; and operational performance requirements and KPIs are being met.
Our next installment (Part 2) will look at the Open RAN landscape (vendors, groups and deployments) in the last 2 years.
