Wireless networks are evolving. In a departure from traditional, proprietary radio network access (RAN) architecture, Open RAN allows mobile network operators to mix and match RAN elements from different vendors utilizing commercial-off-the-shelf (COTS) radios and run software-based functions on standard servers. O-RAN offers MNOs the advantages of vendor diversity, capex and opex reductions and the ability to create differentiated services.
Two big issues, however, are slowing O-RAN’s adoption and beneficial impact, particularly with big MNOs. First, there needs to be a proper acknowledgement of how big MNOs buy RAN products. Secondly, no single O-RAN vendor is responsible for overall systems integration.
National and multinational MNOs have long relied on a few large, vertically integrated original equipment manufacturers to design and build their networks to MNO specifications and reliability standards. North American MNOs have their monopoly AT&T Bell System roots. European telcos and other MNOs around the world have their Posts, Telegraph and Telephone government agency legacies.
The 1970’s Bell System’s tagline was: “The System is the Solution.” AT&T’s 21st century version is: “The Network is the Killer App.” Not a lot has changed in how the Big 3 U.S. MNOs – AT&T, Verizon, T-Mobile – each with over 100 million wireless subscribers and $8-10 billion annual wireless capex budgets, think about building and running their networks, and consequently, how they pick their vendors.
To paraphrase an industry adage, “It takes a long time to get on the MNOs’ approved vendor list, but once you do, they never stop buying!” Getting on those lists is a long, rigorous, and expensive process involving lab and field product evaluations, and financial analysis to determine the supplier’s viability.
Cell sites are the cash registers on the MNO networks. Any cell site failure or downtime can result in lost revenues and will draw regulatory scrutiny. MNOs need to know that their RAN vendors have staying power with the size and scale to meet stringent network performance and reliability standards.
For that reason, big MNOs don’t buy COTS radios. More importantly, when a network outage occurs, the MNOs want a primary vendor to be accountable for fast end-to-end network restoration.
Criticizing incumbent OEMs for locking in MNOs with proprietary designs is to criticize the MNOs themselves and to overlook what MNOs value most. (Spoiler alert: It’s not just products!). MNOs buy what they specify. O-RAN advocates need to be more customer-centric and collaborative with major OEMs if they expect to win orders from big MNOs.
The larger question, though, is “Who has the point?” Of the myriad hardware and software vendor members in the O-RAN Alliance and Telecom Infra Project, few have the size, scale, and capability to manage the end-to-end system integration. In our April 2021 article on DISH Wireless’ O-RAN supplier lineup, we flagged that DISH had a challenge in managing such a mix of players.
DISH realized that to meet its FCC-mandated population coverage goals on time, it had to become its own systems integrator. To its credit, DISH’s team met the challenge and hit the target. But DISH is an outlier. Not all greenfield deployments will work that way.
Here’s the point: The customer should never, ever be put in the position that it must become its own systems integrator to make O-RAN work.
O-RAN brownfield deployments with established MNOs like Vodafone and Telefónica, and now AT&T, as Inside Towers reported, are first relegated to niche, or edge, applications before any major network overhaul is considered. In fact, AT&T’s award to Ericsson may become the prototypical arrangement for how large MNOs will upgrade and migrate their traditional networks to O-RAN.
O-RAN is an important next-generation wireless technology. To gain industry-wide acceptance, proponents must find better ways to make inroads with the big MNOs and their preferred vendors like Ericsson. How long that will take, and in what manner, remain open questions.
By John Celentano, Inside Towers Business Editor