The Open RAN revolution will not be atomised

The revolution will not be brought to you by Xilinx in four parts, without commercial integrations...

Up to 80% of spending on “Open RAN” will be handed over to “traditional RAN incumbents”, according to a new report out from Appledore Research.

Report author Francis Haysom, Principal Analyst Wireless, Appledor Research, said that of the overall RAN spend on components and services by 2026, a third could be invested in Open RAN, which comes to around $11 billion. Of that $11 billion, about 80% of it would go to  traditional vendors offering pre-integrated solutions that contain internal open interfaces.

The “true” multi-vendor version of Open RAN – where operators or Systems Integrators assemble a “best of breed” network from a variety of vendors – might account for about 20% of the $11 billion RAN spend. And of that $2.2 billion, about 30% of that will be spent on System Integrators.

Haysom told TMN: “Our central proposition is that everything will be ‘Open RAN’ in 15 years, but with the caveat that a lot of that business is with traditional vendors with open interfaces within an integrated portfolio.” Haysom said that procurement functions within large telcos are conservative, and prefer to be able to deal with a single point of contact for service.

“The [Open RAN] tech might be wonderful, you might prove that the interfaces can work, but who can give you five years support and maintenance on that interface and keep it up to date over next five years when you are rolling out nationally?”

That means that it is imperative for smaller players to form ecosystem clusters, and for some to start thinking about their role as Systems Integrators.

The report’s executive summary said: “The single largest new market opportunity in Open RAN will be systems integration. We expect this to comprise around 30% of multi-vendor Open RAN spend. More than any other part of the market, this is likely to see the greatest competition: not only between established equipment vendors with services arms, but also software integrators, as well as operators themselves reselling their own experiences as proven blueprints.”

Haysom name-checked companies such as IBM-RedHat and VMWare, “delivering a complete solution from a best of breed blueprint”.

News released today from Telefonica O2 Germany could be used as an example. Here NEC is acting as a System Integrator for an Open RAN Pilot that also includes ADVA, Altiostar, GigaTera Communications, Intel, Red Hat, Supermicro and Xilinx.

The O2 news also illustrates another point that Haysom makes. The trajectory is towards Open RAN, but things are not going to happen quickly. The O2 Germany pilot is for just three live sites, initially, with any further rollout not planned until 3Q 2021. Deutsche Telekom has said that its principle 2021 Open RAN pilot will be of 25 sites. We are still in the early days of tecnology adoption.

Open but integrated

So why might operators buy “Open” solutions from an integrated incumbent vendor – what is the advantage of pressing for Open interfaces and then buying most of your RAN from the same vendor in any case?

Haysom said that the chief motivation here is to avoid the future lock of a single vendor landscape. Even if operators have chosen just one or two operators, insisting on internal open interfaces gives the opportunity to upgrade or augment functional capability with new vendors. For example a Nokia Near Real Time RIC within a Nokia network could be augmented with third party xApps.

In fact this would accord with Nokia’s own recent messaging on the RAN, where departing CTO Marcus Weldon has talked about being “Open but integrated” as the ideal approach within the network.

Haysom said that Appledore had modelled its forecasts not based on rollout targets or declared operator plans, but by matching investment to how new technology is usually adopted.

I don’t think we’re being bearish about, it but equally we’not being crazily bullish either,” he said.

However, there is a caveat – Open RAN could yet “go the way of Small Cells and NFV”, if companies do not develop a sustainable ecosystem and also consider the longer term issues of management and operational support.

“Success may not come down to the technology, but to buying behaviours. Small players need to create ecosystems and think about integration.”