Strand Consult, a leading independent European analysis
research firm for global telecommunications and mobile industry said that over
the past few years, Open RAN has received a lot of media attention. The solution
was first marketed as an alternative to Chinese suppliers such as Huawei and
ZTE and subsequently, as a way to rollout 5G faster and cheaper. If you believe
those who market Open RAN, then the world’s mobile operators should be lining up
to buy it. However, the reality is that Open RAN is a commercial catastrophe.
It’s something that everybody talks about, but nobody buys.
The company said
it has nothing against Open RAN. However, they want to create transparency at
the O-RAN Alliance, and some of its members have pushed back against it. Indeed,
Strand Consult’s transparency concerns are shared by policymakers in the EU and
US, notably the House of Representatives Foreign Affairs Committee.
Last month Strand
Consult released the report “Open RAN
and Security: A Literature Review”. While Open RAN has received
significant press and policy attention, there is relatively little scientific,
empirical, and academic analysis of the Security topic. The company reviews the
literature that does exist which includes academic papers by German and Taiwanese
engineers, an official technical security review by European authorities, and
some white papers and blogs by Open RAN trade associations. The goal is to
create objectivity and transparency about the actors promoting Open RAN so that
mobile operators, investors, and other stakeholders can make informed
decisions.
A few weeks ago,
one of the high-profile companies in the Open RAN space, Parallel Wireless, laid
off more than half of its employees. It came just months after the same company
said it would double the number of employees by the end of 2022. The
reason for the scale-down, according to Parallel Wireless, is that the market
is developing more slowly than expected and that Open RAN is starting to look
like a marathon, not a sprint. Shareholders at Parallel Wireless probably
came to the conclusion that it will be difficult to deliver the Open RAN success
story. Indeed, they may be looking for a buyer to recover some, if any, of
their investment in the company.
Much of Africa,
Latin America and Asia are still 2G/3G markets. Hundreds of millions of people
today and in the future will still use phones that only support 2G and 3G. In
fact, the most widely used network technologies in Africa and Latin America
today are 2G and 3G. Many emerging countries are behind to roll out 4G. This is
not to say that operators in Africa and Latin America are not innovative to add
4G coverage on cell sites and base stations that support 2G/3G they try to
innovate and upgrade as much as possible. However, mobile operators face
certain limitations as much as they try to economize. While policymakers may
want ubiquitous 5G, it is still a challenge to roll it out in many countries,
to say nothing of the requirements of end users demand for 5G devices and
services as a driver of the technology.
Open RAN and O-RAN
require 4G/5G technologies. They are not substitutes for 2G/3G, nor shortcuts
to 4G/5G. Next generation networks still require the installation of regular
RAN technologies before any Open RAN technologies can be used. Simply put,
Open RAN does not offer 1:1 replacement for existing networks in Africa, Latin
America, and Asia. This means Open RAN is not a plug and play solution for
low-income subscribers in emerging markets.
Last week the
European Commission published the report Cybersecurity of Open Radio Access Networks which
analyses the cybersecurity implications of Open Radio Access Networks (RAN). It
includes background on the technology, an assessment of security risks, and
guidance for implementation. The report is significant as it represents perhaps
the only official government assessment of Open RAN.
While the
governments of US, United Kingdom, India and Japan promote Open RAN, they have
not yet published any official, authoritative security studies on the
technology. The European Union report was developed by the Network and
Information Systems (NIS) Cooperation Group which includes the security
authorities of the 27 EU-member states and ENISA, the EU Agency for
Cybersecurity.
The Open RAN
cybersecurity report is an appendix to and expansion of the EU tool box for 5G Security, the set of robust and
comprehensive measures for a coordinated EU approach to 5G network security.
The report is not a position paper which argues for or against a policy.
Rather, it is practical, technical approach to ensure that Open RAN aligns with
the EU 5G 3GPP tool box.
Open RAN is not a
per se standard but a collection of technological features purported to allow
different vendors to supply 5G networks with “standardized open interfaces”
specified by the O-RAN ALLIANCE. Note that O-RAN only addresses internal RAN
components. The industry still relies on 3GPP, the 3rd Generation Partnership
Project, to build an end-to-end mobile cellular network and to connect end-user
devices.
Citing security
concerns, the Federal Communications Commission rejected a US operating license
to China Mobile and may revoke approvals for China Telecom for its failure to
demonstrate that it is not influenced the Chinese government. Other O-RAN
ALLIANCE members include Inspur, Lenovo, Tsinghua, and ZTE, companies the US
government restricts for security reasons
After some years,
Open RAN has yet to notch a major commercial success. If Open RAN gets the growth
its proponents predict, it will account for less than 1 percent of the 5G
mobile sites in 2025; not more than 3 percent in 2030 (install base). It looks
like Open RAN is too little, too late to make a difference in a world in which
operators deploy 10,000 classic 5G sites every month. Note that the RAN cost of
an average mobile operator is equivalent to about 3% of their ARPU. In practice,
this means that if a US operator passed on all Open RAN savings to customers,
the average subscriber would save 40 cents per month.
