The radio access network controversy has its roots in national security concerns involving Chinese vendors.
“The broad trend towards open architectures with increasing virtualization will accelerate,” said Pekka Lundmark, president and CEO of Nokia, talking about open radio access networks, or open RANs. The term radio access network refers to cellular system base stations and software-defined networking.
First, the U.S. government has declared the use of Huawei equipment by cellular carriers in 5G wireless communications networks to be a security risk and has barred its use.
Second, a billion dollars’ worth of Huawei equipment already has been installed.
Third, installing open-RAN equipment is supposed to allow carriers to use competing manufacturers’ technologies for lower prices.
Fourth, taxpayers will pay for replacement equipment under the Secure and Trusted Communications Network Reimbursement Program.
On Nov. 23, House of Representatives Committee on Energy and Commerce Chairman Frank Pallone and Ranking Member Greg Walden sent FCC Chairman Ajit Pai a letter, urging him to assist companies financially. The companies in question mostly are small communications providers — rural cellular companies — eligible for reimbursement for the cost of removing and replacing suspect network equipment.
FCC Chairman Ajit Pai said that traditionally, wireless networks rely on a closed architecture in which a single vendor supplies many or all the components between network base stations and the core. He said open RANs can fundamentally disrupt this marketplace, leading to an exponential growth in the number and diversity of suppliers, more cost-effective solutions — and place the keys to security in the hands of network operators, as opposed to a Chinese vendor.
Commissioner Jessica Rosenworcel suggested launching an open RAN testbed at the FCC to bring together operators, vendors, vertical interests and government agencies.
Commissioner Brendan Carr said that the FCC needs to accelerate the transition to open RAN so smaller providers looking to use the rip-and-replace dollars have confidence that they have a real choice, and open RAN vendors have a real shot at competing for their business.
Commissioner Geoffrey Starks said no carrier should be forced to adopt open RAN. Nevertheless, he said their consideration of open RAN would encourage global competition with Huawei, capitalize on U.S. software advantages, accelerate the development of open RAN as a product model and a business case, and allow alternative vendors to enter the market and offer specific network solutions.
Commissioner Michael O’Reilly also said the process should be voluntary. He said open RAN can reduce threats to overall network security.
A report written by Caroline Gabriel, the research director and an analyst at Rethink Technology Research, forecasts that open RAN will be deployed at 65 percent of all cell sites by 2026, accelerating fastest with small cells. Her report says open RAN will account for 58 percent of total RAN spending at $32 billion.
Over at Dell’Oro Group, vice president and analyst Stefan Pongratz projects the total RAN spend will approach $70 billion to $80 billion for the combined 2020 and 2021 period. He said that although Dell’Oro Group correctly identified that the RAN market would appear disconnected from the underlying economy throughout this year, it underestimated the pace and the magnitude of 5G rollouts, calling it an acceleration at a torrid pace.
Here is how Pekka Lundmark sums things up:
“Telco operators will continue to need to support massive capacity demands with commensurate cost increases. As a result, we expect capex to remain constrained, as operators will look to drive a step-change in cost effectiveness.
“The broad trend towards open architectures with increasing virtualization will accelerate. This will be driven by cost pressures as well as the need to increase speed and agility.
“Adoption will vary widely and a full transition is more than a decade away, but the shift to more open interfaces, virtualization and cloudification, network function disaggregation, AI-driven automation and optimization is well underway.”
Huawei has every incentive to continue marketing proprietary radio access network equipment, wherever it can. For the United States and many other countries with security concerns, momentum increases in favor of open RAN.