Europe’s Open RAN Alliance

Big-four operators pledge to accelerate Open RAN roll-outs

Last week, Europe’s four major telecom operators, Deutsche Telekom, Orange, Telefonica and Vodafone announced a memorandum of understanding to support the roll-out of open radio access network (Open RAN) technology in future mobile 5G networks. Open RAN has great potential to disrupt the telecom industry.

The operators’ move is a signal to the industry’s supply chain and the regulators overseeing it of their commitment to Open RAN. The telecom providers are expected to work together with new and existing partners, industry bodies including the O-RAN Alliance and the Telecom Infra Project, as well as European policy-makers, to ensure the technology quickly gains acceptance.

The announcement is notable for a collective view that Europe could do more to stimulate innovation and build a 5G ecosystem. A concerning trend for the region is that many new players that are playing an important role in the development of Open RAN hail from either the US or Asia.

In 2020, the US realized that it was lagging behind China in developing and rolling out 5G equipment. It started a push for Open RAN standards, which quickly gained pace, and in November the US Congress passed a bill approving $750 million in public funding to develop Open RAN technologies.

Among the four major European operators, Vodafone has been the most vocal about the opportunity of Open RAN so far, and in 2020 committed to deploy the technology at more than 2,500 sites in the UK.

In a traditional RAN approach, networks are deployed using fully integrated cell sites, where the radios, hardware and software are provided by a single supplier as a closed proprietary solution. But with several European governments having banned equipment from Huawei, mobile operators in Europe are re-evaluating the way their networks are deployed.

Open RAN allows the industry to develop standards and technical specifications that define open interfaces within the radio system, including hardware and software. This allows operators to mix and match components from different suppliers for deploying and running their networks. Network operators will also be able to draw on supplier innovation to push down costs, and more flexibly deliver customized services in response to evolving customer demands.

The introduction of Open RAN, virtualization and automation is expected to spark a shift in the way operators manage networks and deliver services. Operators will be able to add or shift capacity more quickly for end users, automatically resolve network incidents or provide on-demand, enterprise-level services for Industry 4.0.

The development and implementation of Open RAN is expected to have a positive impact on the European telecom market. The big-four operators believe that the European Commission and national governments have an important role to play to foster and develop the Open RAN ecosystem. They can achieve this by funding early deployments as well as research and development, and by opening test lab facilities. They can also incentivize more diversity in the supply chain by lowering barriers to entry for small suppliers and start-ups.

However, for Ericsson and Nokia, two of the world’s leading providers of RAN infrastructure, the entry of new competitors is sparking a change of emphasis. For example, in 2020, Ericsson announced a tentative first step toward Open RAN through a portfolio of cloud-native software solutions for the RAN (see Ericsson Shifts to Cloud RAN).

We expect further efforts from operators to trial and deploy Open RAN, helping to build momentum for the technology. Indeed, during our Predictions event in October 2020, we set out an expectation that most leading operators commercialize at least a part of their network with Open RAN technology by 2023.