Industry Voices—Schoolar: Open RAN can give operators more choice, if they really want it

Open RAN and virtualized RAN (vRAN) have seen a significant increase in attention since Mobile World Congress this year. FierceWireless has certainly done its part to cover the topics since the conference such as here and here

The underlying principal of open RAN calls for the use of open interfaces to create vendor interoperability between the radio and base band unit (BBU). Right now, the radio and BBU need to come from a single vendor. Opening the base station interfaces will allow for an operator to mix different vendors: One vendor for the radio and one for the BBU. The benefits of this are, of course, price competition as more vendors can now bid on different parts of the RAN, and secondly it gives operators more network flexibility and choice. For example, if one vendor has a unique radio, an operator can deploy it without having to change out its BBU vendor.

This fits a common operator refrain; they want more vendor choice.  However, buying patterns don’t always support this. When I started covering this market, operators had more choice. Nokia and Siemens weren’t the same company nor were Alcatel and Lucent. Today they are all combined into Nokia. And, don’t forget Nokia has also consumed Motorola and Panasonic in Japan. Ericsson for its part acquired a significant portion of Nortel. Now to be fair, this consolidation can’t be entirely placed at the feet of operators, but those operators’ purchasing practices did play a role.

Mobile operators are a conservative bunch. Selecting a RAN vendor is a million to billion-dollar decision so they'd better get it right. If they don’t get it right they'd better make sure they have a good excuse. Selecting a vendor that most of their peer operators use gives them some coverage. If something goes wrong they can say their decision was like that of a lot of other operators. The case can be made that obviously this is something they could not have foreseen. However, if they go with a vendor that nobody else uses and something goes wrong, they can’t make that excuse. They are out there on their own. This type of thinking has helped get us to the point today where three vendors have over 70% of the market. Those vendors are always a safe choice. The shrinking number of small cell vendors provides another example of this practice. While operators could have used small cells to bring more vendors on board, in the end most of the small cell business has gone to the major established macro vendors.

So, could this happen again with open RAN? Sure. While there are clear benefits to increasing the number of RAN vendors in the network, there are clear disadvantages as well. Smaller operators may not want the added complexity of managing more vendors. It removes the “one throat choke” element we so often hear about. Larger operators that do have the resources to manage more vendors will still be concerned with smaller vendors’ ability to scale along with those vendors’ financial stability.

All of this is not to say the smaller RAN vendors can’t find a way to sell kit to mobile operators. They can. To do this I believe they need to find their niche. Smaller RAN vendors must develop some area of performance that differentiates them from the large incumbent RAN suppliers. To go with that, they also need to focus on just part of the network. Don’t look to satisfy an entire network’s BBU or radio requirements. Instead, just focus on smaller specific deployments like indoors, or stadiums, or some other kind of enterprise application. That way they can start off small and prove themselves before dealing with the question of scale. Smaller vendors can’t expect to succeed by only being cheaper. Price is always important, but it isn’t the only thing. Give those conservative operators a way to dip their toes into new RAN vendor waters without drowning.

Daryl Schoolar is principal analyst of wireless infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at [email protected] and follow him at @DHSchoolar.

Industry Voices are opinion columns written by outside contributorsoften industry experts or analystswho are invited to the conversation by Fierce staff. They do not represent the opinions of Fierce.