The Mobile Telco Sector Needs to Double Down on Open Standards and an Open Playing Field

Over the past 25 years, the US$1.5 trillion mobile service provider economy has stimulated not only considerable innovation but also consolidation in the mobile telco infrastructure vendor sector. During that time the number of mobile telco infrastructure vendors has largely consolidated to five major end-to-end telco original-equipment-manufacturer vendors: Ericsson, Huawei, Nokia, Samsung, and ZTE.

To a greater or lesser degree, mobile network architecture to date has been proprietary in nature as vendors have developed ultra-reliable but essentially exclusionary infrastructure and software to run their networks. However, as LTE has matured to Advanced Pro and 5G technologies have come into play, there is an increasing imperative to adopt more software-defined and cloud-native architectures to improve performance, reduce cost, and boost efficiency.

The Information Technology (IT) world has generally emphasized a high degree of interoperability that has pushed equipment to be very cost competitive, whereas the complex architectures of telco networks, legacy equipment, and the requirement for ultra-reliability have favored end-to-end solutions from telco vendors. It looks like over the next five to ten years, a second wave of innovation should break down barriers between the telco and IT sector and push the telco sector to greater adoption of open standards and even greater interoperability.

The impact of open standards and virtualization could have significant impact on the telco’s radio access network assets. Cloud Radio Access Network (RAN) holds the promise of reduced capital and operating expenditures as well as greater network functionality and services while Open RAN (ORAN) holds the promise of greater interoperability and a multi-vendor competitive pricing environment. Cloud RAN and ORAN are building momentum. Initiatives are in place by Vodafone, Telefonica, Turkcell, and Deutsche Telekom. One of the more prominent mobile telcos is Rakuten (Japan).

Rakuten Mobile became the fourth mobile operator in Japan recently and in April 2019 started deploying the world’s first end-to-end cloud-native commercialized network that is based on Open Virtualized RAN (vRAN). In collaboration with different software and hardware partners, Rakuten Mobile targets reducing not only capital expenditure by as much as 30% for on-site deployments but also operating expenditure by 40% in comparison to traditional RAN systems. Altiostar, a RAN software-solution vendor, is playing a prominent role in helping Rakuten develop full vRAN baseband functions. However, Rakuten has drawn in Nokia, KMW, NEC, Airspan, Sercomm, and Qualcomm to deliver a variety of novel solutions for its 4G and 5G network deployment scenarios.

The pressures to bring down infrastructure costs and at the same time increase network functionality—to keep up with web-scale providers such as Amazon Web Services and Microsoft Azure—will not go away. Many operators may still opt for the single vendor telco solution while others will continue to persevere with a multi-vendor approach. If they do, what should they focus on?

• Standardization is important, but network operators and their ecosystem partners should not necessarily wait for its full maturity. Standardization—e.g., the 3GPP standard releases and ORAN open interface specifications—can help build up a common rule and bring global scalability of network deployments.
• There are always concerns about the operation and integration complexity of a multi-vendor network. As a result, network operators should provide proper training for employees to improve network operations and integration skills.
• The mass commercialization of Open vRAN is arguably a long-term initiative, but with the expansion of the ecosystem and more deployment success cases, an inflexion point will be reachable in the near future. Network operators therefore need to start planning their open vRAN footprint in small and easily manageable scenarios.

The upside could be substantial from Cloud and Open RAN. However, mobile telco chief executive officers, chief technology officers, and chief financial officers will need to confirm objectives, conclude technical and performance trials, and allocate funding that will no doubt have to come out of existing budgets for investment and upgrade. Operators across the board (and not just the Tier 1 operators) need to put pressure on the infrastructure vendors to fully adopt open standards hardware and software. Otherwise these operators should not complain that they are hemmed into a single vendor approach and that the infrastructure ecosystem is likely to be dominated by a handful of large-scale vendors.