Telefonica has become a strategic investor in vRAN player Altiostar, via its corporate investment vehicle Telefonica Investment Ventures (TIV).
The investment is the latest sign of major operator support for open network architectures, including that of non-traditional radio network vendors.
Thierry Maupile, Exec VP Strategy and Product Management, Altiostar, told TMN that the motivation for the investment is not primarily financial, but more strategic. That’s especially because it brings Altiostar the public backing of a T1 global operator with legacy networks.
The company raised $114 million earlier this year, in a deal that saw greenfield Japanese operator Rakuten become an investor.
“We are not raising more money in the short term besides strategic investors. At this time the priority is more about validation and support of key operators,” Maupile said.
They have looked at it very seriously and it does create its own set of challenges for existing operators. But their conclusion is that this is their direction
As well as backing for Altiostar, Maupile sees the investment as confirmation of Telefonica’s backing for the open network and open RAN ecosystem, despite having a complex legacy network.
“Rakuten is seen as greenfield, but here is validation from a major T1 global operator with legacy networks and that’s very important. They have been working at this for some time. We have multiple PoCs with them, so they have looked at it [Open RAN] very seriously and it does create its own set of challenges for existing operators. But their conclusion is that this is their direction and they need to support the development of the company.”
According to Maupile, Telefonica is starting to produce RFPs aligned to the new business model, with RFPs for the different tech domains, no longer for a total end-to-end RAN.
“There are RFPs for radios, software, servers and services – it’s changing completely the whole procurement approach,” he said.
Maupile said that the open RAN and open network ecosystem is growing fast. “A year ago there were really 10 ecosystem partners in this area, and now there are more than 40, from chipsets to servers to NFVi providers to systems integration. That’s a revolution compared to having a very limited number of vendors.”
A whitepaper from Telefonica said that with an open access approach, “Telefonica could deploy a huge range of basebands and radios from different vendors, enabling multivendor interoperability as a way of increasing competition.”
Maupile added that the timing is perfect as Altiostar emerges from an intensive development and deployment phase with Rakuten. The vendor can now leverage that know-how with other operators, he said.
“One year ago we were very focussed [on Rakuten] but now we are in a position where we can do more – and additional funding allows us to expand and accelerate.”
In February Telefonica outlined an an open access architecture that included vDUs from both Mavenir and Altiostar. The company is also using Parallel Wireless and Altiostar in trials of TIP Open RAN equipment in Latin America.