Rakuten’s Platform Offering Adds Momentum to the Telco Trend toward Modularity and Disaggregation

Rakuten is building an operator-enabling platform for 4G and 5G called the Rakuten Communication Platform (RCP), which is based on the principles of cloud-native, automation, and open-source development. The RCP is envisioned to allow operators to quickly purchase and deploy a converged 4G and 5G containerized core virtually, allowing them to dynamically scale their operations based on resource demands, take advantage of OpenRAN for disagregation, and utilize Commercial Off-the-Shelf (COTS), thereby increasing Capital Expenditure (CAPEX) savings. The RCP’s Cloud-Native Network Functions (CNFs) are powered by NEC and Altiostar, and Rakuten has plans to acquire Innoeye for fully automated Operations Support Systems/Business Support Systems (OSS/BSS) for the platform. While Rakuten’s 5G launch, initially meant for June 2020, has been delayed by three months due to COVID-19, Rakuten has been active in having talks with governments around the world about RCP, with talking points centering around security and providing connectivity for rural areas using the platform.

The innovation and offering of the RCP could very well be an industry first—an operator offering a platform providing cloud-native functionalities as-a-service. The RCP is a symptom of the much larger market trend of operators veering toward opting for modularity rather than an all-in-one proprietary approach. The modular-centric approach introduces a new telco landscape centered around a sharing economy, automation, and dynamic scalability, thus potentially relinquishing operators from diminishing profit margins that have eroded from falling Average Revenue Per User (ARPU), decreasing voice revenues, and the high CAPEX that typically comes with network deployments.

Beyond creating a new ecosystem centered around a cloud-native and open source approach, the RCP could potentially bring benefits to the operators that would utilize the platform. Containerized microservices provide a potential solution to the challenging issue of orchestrating Virtual Network Functions (VNFs) on the Virtual Machine (VM), as well as a solution to the limit of the elasticity of the VNF. VNFs are designed to be able to scale in and out through the addition or removal of VNF Containers (VNFCs), but not up and down, as this requires a restart of the VNF and therefore the loss of state data. A containerized approach allows for scaling up and down, which is important for certain value-added 5G applications such as Mobile Edge Computing (MEC) deployments in a factory, which require different resources based on changing criteria such as latency, bandwidth, etc. Errors in certain microservices will also not disrupt the other functions, thus guaranteeing availabilities crucial for mission-critical applications such as port management, factory remote controls, etc.

The introduction of the likes of the RCP shows that we will see the telco industry become richer in terms of partnerships and diversity, with new vendors offering a value-add and Network Equipment Providers (NEP) offering their value proposition. While ultimately these new vendors have the same objective of providing operators with the capabilities required to do their jobs—i.e., deliver connectivity based on Service-Level Agreements (SLAs), remain competitive in terms of wireless functionalities and standards—they revolve around different philosophies.

New vendors are also more geared toward creating an integrated ecosystem through joint Intellectual Property (IP), open-source development, OpenRAN concepts, and a multi-vendor approach. However, this is not to say that NEPs are not embracing many of these new concepts themselves, albeit in different ways. For example, over 80% of operators have embraced the telco cloud; as such, we see Tier-1 NEPs such as ZTE, Huawei, Nokia, and Ericsson embracing cloud-native methodologies in their product portfolios.

NEPs are proven and tested, providing better capacity and performance with the ability to leverage on open-source code by hardening it to carrier-grade quality, whereas newcomers are more familiar with the cloud-native and software approach. However, moving forward, operators will eventually have to pick and choose a deployment model that best suits their needs. While each business case differs, a general rule of thumb is for operators to understand their own capabilities and find out where they stand best in the value chain. For instance, while Tier-1 operators have the resources to be their own Systems Integrators (SIs) for multi-vendor cloud deployments, operators that are Tier-2 and below might be better off outsourcing SIs. Operators need to move to the beat of the drum, which is the changing industry demand for operators to be more than a “dumb pipe” for connectivity. As forthcoming 5G comes closer, enterprises require not only connectivity, but also services to ensure that their business applications run as intended, meeting certain mission-critical requirements such as low latency and bandwidth, security, and customized services based on differing applications. To meet these demands, operators must innovate beyond what they were traditionally used to providing, and the RCP is an example of how operators can capture the platform play for new 5G functionalities, which will no doubt have to be extremely agile and cloudified to leverage the benefits of Artificial Intelligence (AI) for automation and data analytics.