If you’ve been following any carrier and OEM news, chances are good you saw that the carriers would like an open RAN system, O-RAN. In fact, there is an O-RAN alliance. Let’s look at what O-RAN is and what it will mean to different groups in the industry.
Let’s have a refresher course.
First off, do you know what a CRAN and cRAN are? Let’s have a quick bullet point tutorial for macro sites, shall we?
- RAN – Radio Access Network, if you don’t know what that is, why are you reading this? Seriously! It’s all the radio access equipment (and sites) in a carrier’s radio network.
- Macro site – basically a full BTS site where the backhaul connects through a router to a BBU that feeds several sectors of radio heads and antennas.
- BBU – Base Band Unit, the rack that controls the radio head and connects back to the core through a router. The BBU connects to the radio head(s) using fiber to control them and feed them data. The BBU does an amazing amount of processing, more than just control the radio head but self-optimizing, neighbor lists, tracking devices, timing from GPS, and so much more.
- Radio head – this is the radio that connects to the antenna. It needs the BBU to tell it what to do. It gets fed the data from fiber, called fronthaul. It radiates RF radiation to the antenna which connects wirelessly to the devices. It needs power, so there has to be a power source near the radio head so it can work. It generally connects direct, direct fiber link, to the BBU.
- Antenna – if you’re reading this and you don’t know what an antenna is, again, just stop now and read Chapter 16 of Electronic Communication (sixth edition) by Robert Shrader, paperback found on Amazon (That’s how I got started), https://www.amazon.com/Electronic-Communication-Robert-L-Shrader/dp/007066563X/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1530707952&sr=1-1 and no, that is not an affiliate link, it is simply an Amazon link so you can read a real book and learn about electronic communication. It is old and dated, but full of knowledge! I got it in college and since bought an updated paperback. Sure, it shows my age, but it also shows I’m never too old to learn! I read it to this day, even though it’s It’s sitting beside me as I write this.
- Active Antenna – this is an antenna with the radio head in it, an all in one unit which will become common in 5G, higher spectrums, and massive MIMO.
- Backhaul – usually a fiber connection from BBU to the core.
- Fronthaul – usually a fiber connection from the BBU to the radio head.
- CPRI – Common Public Radio Interface, eCPRI is the evolved version being used for 5G, which is the communication used between the BBU and the radio, or the cloud BBU and the radio.
- xRAN – is an organization but also a term to open up the architecture of the radio network to be common and use common equipment, http://www.xran.org/ to learn more.
- Core – this is the data center that controls all of the BBUs, generally has all the servers, mobility manager, internet access, and billing information. Today, these can be in one location or spread across a country or partially virtual in the cloud. They are working to make it virtual, not quite there, yet.
- CRAN is the centralized RAN. That is where you have a BBU hotel somewhere that ties into the core and the fronthaul feed many different radio heads spread across a building, stadium, or town. Many BBUs in one location and radio heads with macro capability at several remote locations.
- cRAN or C-RAN is a Cloud RAN. This is where the cloud does some of the BBU processing activity to feed the remote radio heads. Not rolling out as fast as we hoped, but it helps virtualize the core to the BBU and the BBU to the radio heads. It turns out the BBU does a hell of a lot of work which is generally proprietary. This means that the cloud servers can’t quite do it, yet. Have faith; it will come with as architecture opens up.
- O-RAN – is an open RAN network meaning that any vendor’s equipment would work on any part of the network regardless of whose core was managing the network. Learn more at http://openran.com/aboutus.html.
So, what does all this have to do with O-RAN? It may change the way the OEMs do business moving ahead. It may make the hardware model closer to the Wi-Fi model than ever. What is the Wi-Fi, model? I will tell you.
- Cheap – Ubiquity and Netgear have cheap Wi-Fi radios. They work well. They offer little or no tech support, but there are online communities that do that for them. If it fails, you replace it. It is a throwaway item, so if it dies, you buy another. This would be bought by your typical local ISP. It works, and it’s cheap, and most people don’t complain.
- Carrier Grade – many vendors, make carrier-grade Wi-Fi equipment. This is someone like Ruckus or Cisco who makes a durable product with great features, smart antennas, and so on. They have a complete line of servers that support the Wi-Fi deployments. They offer support for their products as a carrier would expect.
How does this apply to O-RAN? Because hypothetically you could buy anyone’s gear and run it into anyone’s core. You see, the cores used to be OEM specific. This had changed in the past 5 years when the carriers insisted on using another OEMs equipment and run it back in the core. In the old days, you had a Nokia core which would have all Nokia RAN equipment on it. Same with Ericsson and Samsung. Even Airspan had to have a server at the core to interface with the larger OEM’s core. Carrier-grade Wi-Fi does something similar. Cisco has been making more and more core gear. The way I see it, they stand to gain if things open up. They have been gaining share for some time.
Now, if it’s truly O-RAN, hypothetically you could have anyone’s RAN go into anyone’s core. This would be without all the tinkering that has to be done to get it to work, like installing interfaces and servers to talk to the core. It seems like all you would do is connect the RAN and have a module in the server that would accept that vendor and radio, and it should be plug and play. By the way, macro sites are never plug and play. They need to be commissioned, integrated, acceptance testing, and so on. But let’s make this easy. Small cells can be plug and play.
It would be so easy as plug and play. There would be a setup in the core to accept specific RAN vendor’s equipment. The carriers need to get all RAN vendors approved, through acceptance testing, to work on their network. All equipment has to be FCC certified (in the USA), of course.
While you may think that getting infrastructure equipment approved to work on a carrier’s network, then you didn’t do it. They go through rigorous testing that requires almost full-time support for each carrier. It could take 3 months; it could take over a year. It’s not cheap either, you have to offer full support, and if they reject you, then you start over.
The O-RAN would change the landscape of deployments. It may allow someone like Airspan, Ruckus, or SpiderCloud to ramp up on a larger level for carriers that are penny pincers to add the lowest cost radio out there. I’m not saying these OEMs are cheap, just that they would suddenly have a level playing field. The carriers would have to do more self-performing on smaller vendors. Would they do it? I am sure they would all try, then they would see how much effort is involved in maintaining their own field workers and support teams.
The carriers still need the internal people to support each OEM, so it’s not as simple as just buy it and put it in. They need to have people that know the equipment from a technical and feature point of view.
One of the ways to getting to O-RAN is to have xRAN. Actually, it’s the common COTS equipment to be the BBU and a common interchangeable CPRI interface. See more on that in the xRAN section below.
Now, let’s look at the pros and cons of the deployment. To do this fairly, I broke it down by OEM, carrier, and vendors. That matters because the view is different for each one.
Here is a list of all the OEMs that I could think of off the top of my head.
- Ericsson – They are an incumbent. That’s where it ends if they intend to make money off of RAN. They stand to lose a lot of revenue unless they can step up another part of their business, like services, software. I don’t see Ericsson as a strong network player. They were partnered with Cisco for years, how did that play out? It worked great for Cisco, but Ericsson, they seem to be losing a step.
- Nokia – Again, in the RAN market, like Ericsson, they will lose a step. However, they have a very strong network group that could help them regain market share, and they are building their software licensing business. This is a pro, and they already see the writing on the wall. What they should do is get the networking group and RAN group to work together, as of now they are still run like 2 different companies under the Nokia name. I am just saying that they have a long way to go before they can compete. Nokia has the end to end package and could dominate if they build trust up with the carriers. Can they do that? We’ll see.
- Huawei – Like Nokia, they may lose RAN share, but they have a strong networking group. This won’t mean anything in the US where the government has banned them, but in China and the rest of the world, they should continue to dominate. For those of you in the USA that don’t know, Huawei is the #1 RAN vendor around the world, but not in the USA. They have strongholds not only in Asia but Canada and Europe as well. They play to win, not sure what their profitability is, but it’s a completely different model than the other players.
- Samsung – Samsung is a great hardware maker, but not strong in the USA. They have a good model to move into the open RAN market. I don’t know about the networking side, but I could see them creating the firmware on another server and building it up. They are already making inroads in the 5G fixed wireless market. They are innovative and stand to gain if they can support the service. From what I have seen, they build a great product but could improve on services and support, at least in the US. I see them running ahead of the pack as 5G opens up new opportunities.
- Cisco – While Cisco has little or no interest in RF, they would increase market share in a big way on the networking side. They are already a player in several carrier’s networks. They could only gain market share. They will continue to innovate and work their way into more and more cloud business. Cisco will come out a winner, and even then, their investors will be disappointed because they always expect so much more from that company. So, do I, but here is an opportunity to take share away from the RF players.
- Airspan – I see another winner here, they could increase market share, especially in the RF portion. They also have some great controllers, and if they can build the BBU applications, they could start to take over more market share, in the US anyway. However, they are still run like a small company so they would need to increase their support staff. I am not sure they would invest in themselves until they won the business, which is backward. It’s up to them how successful they could be.
- SpiderCloud – do you know that SpiderCloud is making an outdoor unit in the CBRS band? Unbelievable! They may have what it takes to put more small cells and offer more products. I see them increasing market share. They already dominate the indoor enterprise market, they could go to the next level if they wanted to.
- Ruckus – Ruckus is making an entry into the CBRS market with their product and could grow that into something that the carriers, like T-Mobile, could use across the board. Right now, they are big in Wi-Fi, but they work with carriers, have relationships, and stand to make a leap if they are asked. It all depends on what their business roadmap Do they want to compete with the big boys? I think they could because they are able to keep going with the likes of Ubiquity selling equipment for way less. Carrier-grade means something to carriers!
- Others – we’ll see, there are so many small cell vendors. They all thought that they could break into the market with little effort. Mainly because they saw that Wi-Fi was easy to deploy. However, to test with the carriers takes patience, money, and manpower. Carriers want support along with reasonably priced equipment. They don’t want a box maker who says, “here you go” and then walks away. They want someone who stands beside their product, not behind, but beside and keeps updating until it’s working better than originally expected.
- Verizon – this is a double edge sword. Verizon wants to be the leader in technology, which they are trying to prove with this push. I think they wanted xRAN to be all about the Cloud and offering new services. I believe they intended to go to the next level with it. However, if this happens, then they will need software to make it to the next level. It puts them back on the same level as AT&T and T-Mobile. However, they could stand to change the model altogether. If the virtual RAN, vRAN, works and they can start deploying radio heads like their CRAN model today, they could get the biggest bang out of the spectrum that they have. It makes a huge difference now that spectrum is so expensive. Verizon has done a great job utilizing the spectrum they have in the best way they can. It’s a win for them no matter what.
- AT&T – AT&T sees that the cost of mobile services is flat. The only new income from that model is new customers. They see that to make money as a carrier they need to add new services, like entertainment and apps and so on. So, they are looking for any way to get the biggest return on the RAN they can without increasing revenue. That means cheaper equipment. It makes sense since they will rely on new services to make up their future margins. They need this to work. They are also in a deal with FirstNet where they have to roll out new spectrum across the USA, this is no easy task and they not only have to touch all the towers, but they also need to cover in areas where they didn’t before. While it will take years to get there, it will be a drain on capital. The cheaper and more efficient they can do it, the better. I see a huge win for AT&T.
- T-Mobile and Sprint – By the time this starts happening, these 2 companies should be one unless the government says no. Anyway, the thing is that they would win in a big way. The New T-Mobile hypothetically could roll out less expensive new equipment into a virtual core for a good cost. They have a lot to roll out. They need to get the Sprint 2.5GHz spectrum rolled out, preferable with massive MIMO, to cover urban US and T-Mobile’s 600MHz to cover rural This has to be done and will need to be done cost-effectively. Unfortunately, the technology won’t be there in time for the bulk of the deployment. Oh well, the future is coming, and they will need more spectrum eventually.
Vendors and Contractors
Generally, I am going to lump all together. The fact is, they will have more work, but they will need to be cross-trained on more and more OEM equipment. This is not an easy thing to do. So, let’s break it down.
- Pros – more work in all regions if the lower cost radios are easier to deploy. It’s going to allow the smaller vendors to provide hardware per the specification of the carrier and OEM. They will see an uptick in sales, and the contractors will get the installation work.
- Cons – the work may be given to anyone that can install and work with a generic server. The tower work will remain the same in many ways, but the groundwork will be more like a data center in a cabinet. The skills to integrate will be less generic so the carriers could call on any Cisco or IT shop to do the work, not someone with OEM experience. This should be good for the smaller shops, but the specialty shops may lose some business.
Site Acquisition and Tower Companies
Here is something that no one looked at.
- Site acquisition teams will need to learn and have documentation for more equipment than ever. They will need to be prepared to understand how all of this equipment will go on the tower the pro is that they will get a lot more work. The con is that they need to add more data to their ever-growing inventory of CAD drawings, spec sheets, and site solutions.
- Tower Companies, like American Tower, Crown Castle, and SBA should be a little worried. While they have iron-clad leases that hold the carriers on the tower from 5 to 20 years, we all know that someone is going to create a smaller radio, less ground equipment, and an all in on radio head antenna (like massive MIMO) where the equipment on the tower will be smaller, lighter, and require less loading. This should mean less money for the large tower companies. That with increased competition may cut into their bottom line. The winner here looks to be Crown Castle who seems positioned to win the small cell asset battle if the states don’t limit their income. However, they should make money on the backhaul and additional services at the small cell. They are in it to win it.
There is an open RAN alliance; the link is below in resources section. This team includes carriers and Qualcomm. Here are the members listed on the website at http://openran.com/aboutus.html as of July 2018.
Notice most of them are carriers. They seem to be looking to lower the cost of the radios on the RAN network. They will; it’s already dropping.
Qualcomm stands to make a ton of money in licensing. They are looking to expand the list of OEMs that they work with beyond the groups they have now. I believe they have the rights to the 5G NR format, and chances are good they will capitalize big time. One thing I learned from Qualcomm after working there a few years, they are brilliant with the licensing and marketing.
Personally, I can’t believe Paul Jacobs is no longer running Qualcomm. What happened? He was such an innovator in business. Not everything worked out, but he was willing to try new things, and most of the time they paid off. He follows his father, Irwin Jacobs, who is another great tech guy that was one of the founders of Qualcomm.
So, when you see this movement, be impressed that an OEM like Nokia is jumping on board and Ericsson took longer to jump on the bandwagon. Nokia may be afraid of losing market share, but they don’t appear to be worried about it. Will that be a good decision? We’ll see in about 5 years. Ericsson, on the other hand, is dragging their feet. They know it will change the landscape of the RAN market.
Not to be left out, Verizon is a member of another group, xRAN. They are not members of the ORAN group mentioned above. They are proponents of xRAN which would be a radical change to the BBU using COTS, common off the shelf, equipment instead of proprietary BBUs. The other thing is it would change CPRI and open it up as a common interface, much like ethernet connections are now between the router and any other ethernet connection. These are radical changes, but it would lower the RAN cost significantly. They know that eventually, this is going to happen, it’s just a matter of when. In fact, the xRAN forum might be the ones who get there first by making the CPRI connection a common connection. If you remember, Alcatel-Lucent was one of the first companies to share its CPRI protocol, Alcatel-Lucent is now owned by Nokia.
The xRAN forum consists of:
- Texas Instruments
- Stanford University
Yes, they have all the big boys because they know that once the xRAN is complete, once eCPRI is plug and play, the rest will fall into place. The carriers get to work with anyone selling COTS server equipment, and it opens up the cloud in a radical way for the carriers to roll out a 5G system.
Also, look at the OEMs, Cisco is a force to be reckoned with. They could literally knock out all the RAN OEMs like Nokia, Ericsson, and Samsung. They have a lot to offer. Nokia and Huawei have strong IP/router divisions, so they could possibly compete, but let’s face it, Cisco could come in and offer strong value when this happens.
This is where the cloud is taking us. It’s an IP world that could have IP all the way to the antenna where eventually we’ll need a radio.
Some things to think about:
I repeatedly mentioned that the hardware is getting cheaper and cheaper. The traditional OEMs could lose their hold in less than 10 years on the RAN network. They will find ways to make money off of software licensing. This would open up reoccurring payments to them. The up-front out-of-pocket cost would be much lower for the carriers, but they would pay forever, hypothetically. The OEMs already do license based on users and equipment, and so on. It would soon be more like a pay per subscriber type of this. There isn’t much money in hardware anymore, but there is a lot of money in software if you can get someone to pay for it monthly. It sounds like a nice model, but hardware, especially something that has to work outside if it’s -10 to 150 degrees Fahrenheit. The macro site has a lot of equipment, routers, servers, BBUs, fiber jumpers, hybrid cables, radios, antennas, and mounting equipment. Even if the carriers get it cheap, it still has to installed, configured, integrated, and tested. It also has to be put on something that needs to have site acquisition, leasing, structural, safety inspections, and upgraded. It will never be free, and this is what the carriers missed with outdoor small cells, they still need to pay for all the additional services.
There is an opportunity for disruptors. For radio suppliers like CommScope, if they can step up, they may be able to supply more than fiber jumpers and small cells. They have an opportunity to displace many of their larger vendors. I see others getting into the act. Airspan has a chance at becoming a real player, again, if they can step up. Dealing with carriers is a huge financial and time drain.
The one thing that the larger companies have in their favor is the support they offer. I don’t mean just phone support, but actually engineering and carrier support. Carriers are needy, and they need the OEM to buy into the vision or create it for them. This is not an easy task, and it takes a support staff. The carriers do a lot on their own, but they can’t support all the vendors all the time. They have a network to run. For a smaller player to step up, they need to come up with something awesome and be able to support it.
One more thing;
I believe all of the OEMs have radios made in China. So, if President Trump starts cracking down on China, it may hurt the radio deployments in 2020. In my opinion, the USA relies on China too heavily for everything, just an opinion. Give China credit; they have cost-effective manufacturing figured out. (Thanks to Wal-Mart), it looks like China runs the manufacturing world. This applies in RF as well as any other industry. I would bet that Ericsson, Nokia, and Samsung rely on China manufacturing as much as Huawei and ZTE. The headquarters of an OEM doesn’t mean much anymore. Look at how all those OEMs are doing all they can to scale back US workers. Many of those jobs are migrating away from the USA.
Hope this helps.
Be smart, be safe, and pay attention!
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