With the increasing reliance on digital networks in all aspects of life, investing in telecommunications network equipment has become vital to achieving technological progress and ensuring the continuity of services, which enhances the ability of companies to provide their services reliably and efficiently.
Companies such as Finland’s Nokia, Sweden’s Ericsson and China’s Huawei have long dominated the telecom network equipment market, with companies such as Samsung and ZTE providing such equipment on a smaller scale, while telecom network operators are seeking a way to break these companies’ monopoly on the market.
According to a report prepared by Bloomberg and reviewed by the Sky News Arabia Economy website, the desire of telecom network operators to break the control of Nokia, Ericsson and Huawei over the telecom network equipment and devices market may now be achieved with the support of the spread of OpenRAN networks, which some see as capable of reshaping the market and opening the door to competition away from companies accused of monopolizing the market.
What are OpenRAN networks?
OpenRAN or Open Radio Access Network is a technology that relies on applying “open standards” in the design of communications networks, unlike the traditional RAN technology that is currently relied upon by communications companies around the world.
OpenRAN, an open-standard technology, aims to enhance the flexibility and efficiency of telecommunications networks. It enables mobile network equipment of all types to work and interact with each other regardless of the company they come from, unlike the traditional RAN technology currently in use, which is a “closed” network that does not allow telecommunications equipment produced by different companies to interact with each other.
Therefore, the OpenRAN standards aim to deconstruct the concept of RANs by creating a more flexible environment for managing communications networks.
OpenRAN networks allow for the integration of new technologies more easily, allowing telecom companies to improve the performance of their networks and provide new and advanced services to users. OpenRAN also contributes to accelerating the deployment of 5G networks and beyond technologies, thanks to its flexibility and ability to support a wide range of frequencies.
By using equipment made by different companies instead of relying on a single supplier, OpenRAN networks can help telecom companies reduce operational costs, contributing to their financial efficiency.
Who wants OpenRAN?
Many telcos believe that OpenRAN will make the market more agile, bring more competition, and help lower prices.
The spread of OpenRAN also helps telecom companies that want to abandon Huawei to replace the Chinese company’s equipment more easily. Rising tensions between Beijing and the West have prompted more governments around the world to demand that their telecom companies remove Chinese equipment from networks due to national security considerations. This has left many telecom companies in the United States and Europe more dependent on Nokia and Ericsson, which has not necessarily served the interests of telecom companies.
The United States is one of the biggest supporters of the spread of OpenRAN networks. In America, there is no major producer of communications equipment, so officials in Washington see OpenRAN as an opportunity for local companies such as Mavenir Systems to enter this game.
Major telecom equipment makers have long been skeptical of anything that would force them to cede control of an industry they dominate, and Samsung was the first to develop and begin testing OpenRAN technology.
Recently, both Nokia and Ericsson have changed their positions, realizing that the transformation is inevitable and could benefit them.
The shift in position has given Ericsson a boost, with the company winning a $14 billion contract from AT&T in 2023 to become the sole supplier to implement the planned OpenRAN project.
The deal shocked the industry, as it was the first time an operator had committed to deploying OpenRAN at scale. Some in the industry also criticized AT&T for choosing just one vendor to build OpenRAN networks, when the technology allows for multiple vendors.
When will OpenRAN roll out?
One of the main issues holding OpenRAN back is that the technology isn’t quite ready. While AT&T has had great success with its Ericsson contract, other major operators like Deutsche Telekom and Vodafone are still testing the technology in small parts of their networks, and there are a number of issues holding them back from adopting the OpenRAN concept.
On the other hand, companies regularly exchange accusations among themselves, because of the lack of sharing of OpenRAN technology deployment roadmaps, which will turn this technology into a closed-standard technology rather than an open source one, which will make it difficult for key equipment to work seamlessly together, so it may take up to a decade before OpenRAN technology becomes a reality, but despite this, the transformation has already begun.
OpenRAN networks are not new networks, but are more than 12 years old, and although they have not achieved any commercial success since then, they are one of the most impressive technological concepts due to their many benefits, as they provide greater network management options at lower costs, and they also provide an open operating system, as the open environment can lead to more innovation by reducing barriers to entry into the communications network.
Al-Qarih reveals that America has sought with all its might to show that OpenRAN provides an alternative to Chinese communications equipment produced by Huawei, specifically with regard to fifth-generation networks, but the strange thing is that the weakness of OpenRAN networks is also its strength.
The open standards of these networks, and specifically the decentralization of functions they enjoy, give attackers greater ability to move and penetrate, which makes many companies hesitant to adopt them. He pointed out that the “open environment” that contains multiple equipment vendors leads to the complexity of operation and maintenance and to a decline in the degree of equipment integration. For example, if a problem occurs, it may not be clear at first which vendor will need to make the decision to address it. The second point lies in the difficulty of determining the location of the failure in the network.
According to Al-Qarih, any mistake made by OpenRAN network operators will have a fatal price, as the multiplicity of equipment vendors directly means varying levels of security in the network, which makes it easy to attack components, and exposes all OpenRAN networks in the world to hacking, not just the hacked network. This requires multiple vendors and operators to develop a unified proactive plan to make a decision in such cases, or repeat what AT&T did by purchasing its OpenRAN network equipment from Ericsson only, which effectively means destroying the concept of the “open environment” embodied by OpenRAN technology.
Operational barriers
Al-Qarih explains that there are many operational obstacles that hinder the spread of OpenRAN networks that are not suitable for small telecom companies. Experience has shown that these networks are not cost-efficient if adopted by telecom companies that operate small and medium-sized networks. The smaller the network, the greater the maintenance challenges and the higher the operating cost, as Open RAN networks consume about 40 percent more energy compared to traditional RAN networks.
Al-Qarih concluded his talk to the “Sky News Arabia Economy” website by confirming that OpenRAN networks represent one of the most impressive technical concepts, but they are still not ready yet and need a lot of development to become safe and effective. Therefore, it can be said that OpenRAN will be a suitable option for the sixth generation technology, which is expected to appear in 2030 and beyond, indicating that companies that have decided to rely on these networks currently must be careful and take their step after assessing the risks.
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