Today, you use a generic USB cable to connect your Android smart phone and have the freedom to install any application on your mobile phone to suit your needs. That is the democratisation of the smart phone ecosystem, where there are minimal proprietary accessories on your mobile phone.
This metaphor is indeed similar to the next big thing in mobile wireless networks – “OpenRAN”. Although OpenRAN is not a new technology as it has been deployed in rural telephone networks in the past for its distinct advantage of lower cost of deployment. It has recently been a hot topic within the industry and has the potential to impact all major telecommunications industry stakeholders across the value chain. Traditionally for over 35 years, the wireless network has operated in a closed model, where the radio equipment and baseband unit is connected via proprietary interface, meaning that the service provider is locked into a particular vendor for the conceivable future.
OpenRAN is a modern wireless network architecture that enables greater choice, flexibility and agility for service providers, as it allows for a mix-and-match of hardware and software vendors, plug and play solutions, cash and carry network items, fostering innovation and flexibility. The Radio Access Network, commonly known as “RAN” could potentially be the last major frontier that may disrupt the telecommunications industry. As mentioned before, rural connectivity has always been the main focus of OpenRAN trials and rollouts in the past. Due to the less demanding environment, it enables MNOs to test out unproven technologies without major disruptions. Also, from an investment and maintenance standpoint, it makes perfect sense for OpenRAN to be initially deployed in rural areas due to the potential savings in cost and time in both deployment and maintenance.
The cost problem of MNOs can no longer be ignored – consumers have been demanding for ever greater capacity and speeds and expect a competitive pricing of their mobile plans. The following new trends originated during the pandemic, but are projected to remain in the post-COVID world:
~40% increase in mobile data usage per capita.
Gap of data usage of urban/suburban and rural areas have closed up.
Peak hour usage has widened in both urban/suburban and rural areas. Off peak data usage has similarly experienced a significant increase.
Consumer demand for higher bandwidth due to usage of network in highly demanding services: HD, 4K video streaming and online gaming.
Increased dependence on mobile networks due to its various use cases in IoT and enterprises.
Figure 2: Illustration of changes in consumer behavioural patterns, pre- and post-COVID eras
Towercos could also be seen as a natural fit in advocating and providing OpenRAN services to MNO customers. It represents a natural step in the evolution of the towerco business model, from only managing the passive infrastructure to becoming an infraCo that also manages the active infrastructure. The RAN segment represents up to 80% of the total network cost, and as towercos gradually master the art of managing the cost of passive infrastructure of MNOs, the possibility of towercos evolving into infracos and managing the RAN as a Network-as-a-Service (NaaS) in the future is indeed a possibility.
Key advantages of OpenRAN, compared to traditional RAN architectures:
Lowering barriers of entry for new and smaller scale vendors. This promotes innovation, competitiveness, and diversification of the supply chain. RAN is a complex component with multiple components within. The OpenRAN concept has interoperability capabilities with minimal configuration. Smaller vendors would also be able to focus and specialise in particular components and MNOs would be able to achieve the highest possible efficiency and flexibility to mix-and-match.
Software centric network with lower dependency on hardware. Upgrading software is comparatively cost and time efficient compared to upgrading hardware in order to introduce new capabilities or services. Vendors would also be able to provide customised software-based services due to the democratisation of the network.
Significant cost savings for MNOs and end consumers. With the increased cost competitiveness, the cost problem of MNOs will be alleviated and this allows for network upgrades to happen more uniformly across different geographic and demographic areas, ultimately lowering the cost per GB for consumers.
As rosy as OpenRAN may sound, key challenges remain before a wider deployment could proceed:
Currently, there are uncertainties on which OpenRAN standards will be adopted by the industry. Vendors and MNOs alike are unlikely to commit when there is a lack of maturity in an innovative concept. The two leading organisations advocating for OpenRAN, namely the Telecom Infra Project (TIP) and O-RAN Alliance needs to continuously engage the industry and advocate for an open-source platform to allow OpenRAN to thrive.
Managing the network will be a key capability that needs to be mastered. With OpenRAN allowing for multiple vendors, this increases network complexity and potential technical limitations, especially when outages happen. Tracing the source of the outage will require input from multiple vendors and this may lengthen maintenance and downtime.
Ensuring the integration of all components before deployment will be crucial. Although OpenRAN is envisioned to be built on a standardised architecture, testing and commissioning will take much longer to ensure all hardware and software will work harmoniously.
In edotco Group, we had an initial explore of the OpenRAN technology including one of the first successful lab trials of OpenRAN in Asia in collaboration with Telecom Infra Project (TIP) and Facebook. The final report of the lab trails can be found here. We have successfully streamed full HD and 4K videos on the OpenRAN network with extremely low latency and high speeds. More recently in January 2022, edotco Sri Lanka collaborated with Hutchison Telecommunications Lanka to conduct an OpenRAN trial on multi-purpose lamp poles. We are pleased to be one of the NextGen towerCos in embracing these new emerging telecom trends in the industry and remain optimistic about their commercial success.
The future of OpenRAN
Despite the key challenges, OpenRAN remains an exciting proposition for the telco industry. There are a few key areas that OpenRAN could potentially thrive in, namely, rural telephony, private networks, network deployment of tier 2 MNOs, suburban and rural network deployment for tier 1 MNOs or potentially finding a logical business case for mass scale 5G rollout. And neutral party host, towerco owned, multi sharing OpenRAN network for any one of the above use cases are indeed a distance possibility in future.
These challenging but lucrative business opportunities would provide OpenRAN with its first chance of fulfilling its long-discussed potential – the time is prime for OpenRAN to be more widely recognised and adopted.
About the writer
Gayan Koralage is one of the pioneering members of edotco Group. He speaks and writes frequently as a thought leader in the mobile and neutral party host telecom tower industry, covering key topics such as the business case for 5G, network disruption, digital economy, digital transformation and inter-generation opportunities in the 2020 decade. Gayan currently serves as the Director, Group Strategy, responsible for long term strategy, pricing and commercials, analytics, bite sized M&A deals, new market entrance performance analysis and project management. He has served additional interim roles of acting country managing director of Pakistan and Sr Lanka. He spearheaded the formation and growth of edotco since 2013, and the sale of a 32% stake of edotco to Japanese and Malaysian sovereign wealth funds in early 2017.
