Looking ahead: Open RAN still faces growing pains

So far, open radio access network (RAN) technology has generated far more discussion than actual network deployments, and that likely won't change anytime soon.

The technology took some major steps forward during 2023, especially with AT&T's new $14 billion deal with Ericsson that is couched in open RAN promises. Other operators touting support for open RAN include Dish Network, Vodafone Group and Rakuten Mobile.

This year, the open RAN discussion stretched far beyond the dweeby confines of the CTO's office. Western governments – led by the US, the UK and Australia – increasingly are cheering the technology as a mechanism to bolster domestic wireless network equipment suppliers, an outcome that could also blunt the rise of Chinese equipment vendors like Huawei, which have been labeled as a threat to cybersecurity in the West.

Where open RAN goes from here, however, remains an open question. Analysts generally don't expect the technology to capture a majority of the world's wireless networking market until 6G at the earliest. Regardless, "open RAN fundamentally changes the RAN and that the industry will see this impact play out over a decade or more," according to Heavy Reading analyst Gabriel Brown.

Measuring progress

Open RAN deployments generated plenty of interest during 2023. For example, Vodafone revealed hopes of adding open RAN equipment across large chunks of its entire European footprint. That covers more than 100,000 cell sites in total.

"Our ambition is to reach 30% open RAN," Vodafone's Santiago Tenorio told Light Reading.

Vodafone would join Dish Network in the US and Rakuten Mobile in Japan in supporting open RAN on a widespread basis. Both Dish and Raktuten are relatively new to the wireless industry and do not have legacy operations. Thus, as "greenfield" network operators, they can more easily shift to a new technology without worrying how it might affect their existing operations.

But for "brownfield" operators, like Vodafone, with systems that could be decades old, adopting open RAN is more complex.

That's why AT&T's multi-billion dollar, five-year deal with Ericsson is so important. The operator said it will shift to open RAN equipment over time while Ericsson serves as its primary vendor and open RAN integrator.

Incredibly, AT&T is also tearing Nokia's equipment out of its network in order to replace it with Ericsson's gear. "We're going to shorten the lives of our Nokia equipment as we replace it with Ericsson," AT&T CFO Pascal Desroches said at an investor event in mid-December. "So that's going to result in some incremental depreciation for next year, non-cash depreciation."

Vendor slowdown

As AT&T CEO John Stankey explained recently, the operator's new agreement with Ericsson stems in part from an overall slowdown in demand for wireless networking equipment.

"With the slowdown in the vendor markets we were able to step back and say, 'What can we do to get an opportunistic agreement where we can drive vendors into a position to move more aggressively on O-RAN to position us long term?'" Stankey said. The result was cheaper equipment from Ericsson, he added.

The slowdown in vendor markets has affected a wide range of companies over the past several months. During the summer, Nokia, Ericsson and Crown Castle suggested that US operators slowed spending more than they had expected. Months later, CommScope, Casa Systems, Vecima Networks, Harmonic, Infinera and Lumentum offered similar warnings, sparking a debate on when things might improve.

Slowing demand for telecom network equipment is clearly a concern for even the biggest players in the market. For vendors targeting only the much smaller open RAN sector, it's a major issue. And it's unclear whether spending will pick up in time to help them survive the downturn.

The politicization of open RAN

Another issue of increasing importance in the open RAN sector is the technology's political implications.

In the US, government support for open RAN can be traced back to the Trump administration. Although President Trump's Attorney General, William Barr, lambasted open RAN as a "pie in the sky" concept, others – like Trump's Secretary of State Mike Pompeo – viewed it as leverage against Chinese equipment vendors such as Huawei and ZTE.

The Biden administration has similar hopes for open RAN. The clearest example sits with the NTIA's $1.5 billion Public Wireless Supply Chain Innovation Fund, which is designed to foster the development of open RAN networks domestically and internationally. The NTIA is an agency of the US Department of Commerce that serves as President Biden's principal adviser on telecommunications policies. 

And there are similar initiatives globally. For example, the UK recently announced $110 million for open RAN research and development.

In a related development, the US military is increasingly voicing interest in 5G networking technology that uses open RAN interfaces. That's clearly driving interest among equipment vendors: Ericsson announced its intent to sell its equipment into the defense sector, while Nokia recently announced it would acquire Fenix Group in pursuit of the opportunity.

A fragmented future

But there are plenty of headwinds blowing against open RAN. One of the biggest issues is the potential for fragmentation within open RAN deployments, particularly following Ericsson's support for class A massive MIMO radios instead of the class B variety.

"There is still a lot of work to do," wrote Mavenir's John Baker, in a blog post about the new options within the O-RAN Alliance's set of open RAN specifications. "The challenge for DU [distributed unit] vendors is to support all four interfaces on the DU, which Mavenir is committed to do," he said.

Partly in response, the NTIA is now looking for a subset of open RAN specifications – a "profile" – that the agency could use to promote the technology in the US and internationally. The goal is to assemble a core group of specifications from the O-RAN Alliance that would be considered essential to any deployment of the technology. 

Whether that will unify the standard or lead to further fragmentation remains to be seen.