Will Open RAN be the start of new deployment business models?

The open RAN system is going to be a new wave in communications. It will open up new doors for disruptors. I look at anyone willing to commit the time and money to a new RAN as a disruptor. Look at what Airspan has done with Sprint’s Magic Box, really amazing. Look at how SpiderCloud made great inroads for indoor enterprise small cells, wow!COP Banners for Wade4wireless

This means that 5G NR will allow for new radios to go to a core in the cloud, just amazing. The open RAN could make the carrier’s reliance on OEMs become obsolete. This is following the path of all other technologies. Carriers will look to white boxes for solutions. Do you want examples? I got them.

Look at the networking equipment. The big boys, Alcatel-Lucent (now Nokia), Cisco, Ciena, and others went to the high-end equipment to compete. They win business based on relationships. The low-end business is being handed to other companies. This has to be a kick in the crotch for Cisco since they owned that market for decades. Now, you have Ubiquity for all the small stuff. Netgear is a major player, and Cisco owns them, but they are a commodity.Small Cell Cover 4

Remember when backups were critical to your computer, now they are done online.

Remember when you needed a memory stick to share files? Now we have cloud drives.

Remember when you had a Palm Pilot, a cell phone, and a pager? Now it’s all on the smartphone.

Remember when Wi-Fi was hard to install and expensive? Now it’s plug and play.

I see that the carrier’s RAN will have the same issues. In fact, I believe that is why the CBRS is so slow to be released. The carriers know that competition from local ISPs will start. They will have to contend with local enterprise and WISPs getting licensed spectrum in select areas to get free of the Wi-Fi they currently deal with. If the interference issue is gone, then the VoLTE could be used in a select spectrum without issues. Voice and data, assuming you have enough bandwidth to handle both.

You see, carriers and OEMs know what is coming. They are doing all that they can to delay competition. Unfortunately, the carriers know that open RAN will save them money. The OEMs know that they must keep a leg up to maintain market share. That’s why Nokia jumped on the open RAN bandwagon; they know that they can make the gear and provide the security that carriers require. However, I see it cutting into their margins when they compete with a commodity item. They will need to offer features and apps to make up the difference. This is a very different business model for a large archaic OEM. I guess we’ll see how nimble they really are.

Ericsson, on the other hand, did not jump on any bandwagon. They know that the wave will eventually come. I am sure they are developing a strategy to deal with it. They have a huge market share so they will be prepared. They just aren’t as happy about it.

Samsung and Huawei are also preparing. In fact, they can’t wait. It should allow them to sell more product. Huawei is the largest RAN vendor in the world, thanks to China, but they are not in the US thanks to the US government not trusting Huawei to spy. Why? Here is what I see, and this is my opinion. If you go to China, Internet access is controlled by the government. Yet, Chinese hackers are in everything, even here in the USA. So, let’s use our powers of deduction. If the government controls the internet and hackers are hacking servers in the USA, then maybe the hackers work for the Chinese government. I think that’s how US politicians see it. All of this activity has kept Huawei out of the USA. After all, isn’t Huawei backed heavily by the communist government of China? Why are they still communist? Shouldn’t they at least change it to a socialist government for appearance’s sake? Honestly!

I digress, sorry, back to open RAN.official logo

Open RAN systems will fit into 5G NR RAN networks better than any other network because it’s all data and it’s available to anyone. Carriers will look to reductions in cost now that unlimited data is creating a flat billing cycle. The carriers don’t make much money off the smartphones, mostly off the airtime. They need to provide new services, entertainment, and games, to make up for lost revenue.

This is where competition for radio equipment will help. Things will become more plug and play than ever.

For installers, this should help business. Cost effective radios open up new opportunities for growth. The equipment still needs to be installed, regardless of the technology. Growth continues. Maybe not where it was, but steady growth and upgrade. New radios mean more site work. We all want more site work. I see the business model for deployment changing as well.Tower Safety for all your safety training!

Once the carriers relied on the OEMs, this is going to be contractor driven for years to come. They will go online and rely on a local tech to commission and integrate the network. This is going to be like any service you get on the internet. I was talking to people that are already building a service for local telecom engineers. If you want to learn more, email me at wade4wireless@gmail.com, and I can set you up with them, whether you’re looking for workers or want to work.

The internet has changed a lot. It’s hitting wireless today, and in 5 years, things are going to change dramatically. It’s just a matter of how we react to the changes.

The OEMs learned that going to LTE, a common IP-based network, would hurt their hold on the carriers’ network. They saw firsthand how they had to create new solutions.

For deployment, they saw how carriers could go direct to the tower crews for work. Again, this eroded profit margin for GCs and OEMs.

For services and hardware, things changed in a year with the growth of reverse auctions. Again, lower margins for all. Distributors have to compete with the carriers going directly to the vendor. They can’t get paid for engineering services that the vendor provides for free.

Services are different. Remember when carriers would pay handsomely for the RF services, design, and so on? That is not the case today. The software is cheap; work is outsourced overseas, new apps test coverage, as well as a drive team did years ago. In fact, drive teams are just that, drive teams, not an engineer. They just take a device in a vehicle, drive and then give the device back to a single engineer, probably in India, who processes the data. This is the working model in the USA for the most part. The engineer may be in the states, but outsourcing is cost-effective.

The OEMs get this; they have to compete. They have to go offshore. Remember when you called Cisco for support and they barely spoke English? Now, most Indians speak better English than people in the states! The model is an accepted and expected way to do business. Most companies outsource all that they can. It’s time to accept the new working models in the USA.

I’m just trying to point out that the business models are changing, get ready. We need to prepare for the new models. I’m going to do all that I can to ramp up businesses to prepare for this new model. It’s all I can do, but at least I feel I can do something to help you out. I feel we can make money in the new world; the technology revolution is upon us. Let’s make it a better world, one where we can prosper and live a better life. I believe we can make it happen!

Be smart, be safe, and pay attention!

See Ya!

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