The Acentury Channel Episode #1: Open RAN vs. O-RAN Communities, and their Upcoming Challenges
In today’s discussion we chat about some of the differences between the Open RAN and O-RAN communities and some of the challenges both communities face in the very near future.
Host: David Shin, Marketing
Guest: Leo Lin, VP Solutions Development, Acentury Inc.
About the Acentury Channel:
The Acentury Channel hosts open discussions with in-house industry experts about the wireless and wireline networking industry. We plan to cover a wide array of topics and provide our insight in latest trends, news, and product innovations.
[David] Greetings, and welcome to the Acentury channel. My name is David Shin, I am your host for today's session. In today’s topic of discussion we cover the Open RAN and O-RAN communities. We weigh in on the differences, what they are and their mandates, and provide some insight on some of the challenges the open communities face.
Today we have Leo Lin, VP of Solutions Development from Acentury Inc. We catch up Leo as he begins the conversation by explaining the differences between the Open Ran and ORAN communities.
[Leo] There are two topics here, right? Open RAN and O-RAN. I know a lot of people are probably confused between these two. Open RAN is formed by a lot of small vendors plus some major players on the Internet side like for example, Facebook... not the typical telecom equipment vendors like Ericsson, Nokia, Huawei, ZTE, right? O-RAN is different. O-RAN was originally two organizations. One was led by AT&T another was led by China Mobile. Then, a few years ago, both organizations sat down together and said, “Why don’t we just standardize with one.” Then they formed O-RAN.
The O-RAN members include most of the operators and major equipment operators including Ericsson, Huawei, Nokia, ZTE, and other big telecom equipment vendors. For those members in the O-RAN, they typically don’t prefer the Open RAN solution. Why Open RAN? A lot of operators are looking at Open RAN to try to push down the equipment costs.
[David] Right, so it’s a capex discussion.
[Leo] A capex discussion, yea.
[David] So, I guess what we’re talking about here is you have your typical equipment vendors, the Nokia’s of the world, the Ericsson’s, the Huawei’s, they have proprietary technology for the RAN. And now what we’re talking about is making it a little bit more open. Removing that front-end capital cost, making it cheaper. And that’s the overall goal, right?
[Leo] Mhm, yea. From the operator point of view, typically they don’t want to be controlled by those major equipment vendors like Ericsson, Huawei, ZTE, or Nokia. So (this is their purpose) with Open RAN. They want to deal with as many vendors as possible, right? If they can introduce a lot of small players, they can significantly drive down the costs.
But the problem is, small vendors, don’t have enough resources to develop carrier-grade solutions. The five 9s [availability].
[Leo]. So that’s the challenge for sure. If you’re talking about this network, there are multiple routes here. First you have the equipment supplier. And second you have the system integrator. Because right now major equipment vendors actually play the role as system integrator. So that becomes the problem regarding Open RAN. If those small equipment vendors supply a lot of network elements, the operator will have to ask the question, who is going to integrate all the elements together?
[David] So, we have the [O-RAN] community that appears to be founded by the equipment vendors as well as the operators. So, there’s a mandate to make it more open to drive down costs. Then you have the Open RAN community which is driven by smaller players. Facebook, and I believe they also have one of the telcos as well. Similar mandate, right? We say it’s the same thing. It’ll make it more open, drive the costs down, make things more interoperable, and then obviously drive innovation. That’s the intent of open technologies anyway, to make it more open to encourage more players to be involved to accelerate innovation and everybody wins. So what you’re saying is the difference is basically the members, right? So it sounds like your traditional equipment vendors and operators appear to be aligned more so on the [O-RAN] side, and on the Open RAN side, you have other up and coming and newer players that are trying to get into the marketplace. And I think the point you are bringing up is (firstly) building carrier-grade type services and solutions, but also integrate all those individual elements together, right?
[David] I think that if I were to look at this analogously, ten years ago, the OpenStack community was part of your infrastructure in IT. It was your open source, virtualized tool that could virtualize workloads. It sounds very similar in terms of its initiative. It was trying to drive down cost and capex. But ultimately the opex could supersede the capex to begin with. It’s a very interesting situation and I feel like this is not something that’s going to get solved overnight. Who is going to be that integrator? Who is going to support that network? I think this is the biggest challenge for both communities.
[Leo] I will say, all the operators, if they really want to move to the Open RAN direction, they really need to ask themselves, are we ready yet? Then, are we able to integrate all those network elements from different equipment vendors? Are we able to do that? And another question is, once we deploy this kind of solution on the network there will be many, many different equipment vendors on the network. Are you ready to do the troubleshooting when something happens? It’s really tricky. Because right now all the operators, they only have, (for example) a couple of network suppliers. For example, they’ll just stay with Ericsson, Huawei, Nokia, or Cisco. Maybe four or five major equipment vendors. So, once they realize there is a problem, and they start troubleshooting, typically it’s easy to…
[David] Point the finger. [laugh]
[Leo] Point the finger, yea. [laugh] And second, they have been doing this for many, many years, right? They’ve gotten used to it already. They need to get themselves ready before they really want to move to this direction. I don’t think they’ll be able to do it right now but if they have a plan for the next five, ten years to get themselves ready for this kind of thing, then they can… For these five, ten years, for sure they need to spend a lot of money to change their own procedure internally, and second they need to provide the proper training to their engineers, (their) employees. Right now, the employees, engineers, I don’t think they’re ready yet.
[David] And I think there’s another dimension to all this. Yes, you need someone to integrate all these pieces. The change management from a management perspective is also a challenge. How to support that as you go forward, is also a challenge. But I think the other dimension to all this is the 5G network. I mean, we’re talking about X (multiple) order more network elements, right? I mean how much more X are we dealing with the 5G network? So not only do we have to deal with all the legacy issues that, let’s just say, proprietary technologies have solved, but we also have to deal with more network elements. And it would require a lot more management, automation, control, and if I were to add another dimension to all of this, security. So, with all these different elements, all these different vendors, all these different open protocols now, that same integrator needs to be cognizant of the security policies across everything. Would you agree?
[Leo] Yes, and since you just mentioned the legacy network. It’s another major concern as well, right? All those major equipment vendors, they spend years on legacy network technology. The voice, the traditional switch, and also the 3G/4G stuff, right? And for those members in the Open RAN community, they typically focus on 5G only, or a little bit on 4G, because they don’t want to deal with the very old technology. But unfortunately, all major operators, they have a huge network with legacy technology. So how to do this kind of thing. It’s really a challenge for those Open RAN members.
[David] Yes, I think that this concept of legacy technology, and how you balance between that and new technology, and in this case 5G, new radio, is a major challenge. It’s almost easier if it was greenfield, but it’s not. Many operators have to deal with different problems. Like I think I read, and you can correct me if I’m wrong, some of the integration points are different. So in China for example, they’re not trying to integrate with a 4G core like they do here (in Canada). So they’ve invested a significant amount to start from scratch. But in our case, to deploy our 5G network, we are trying to integrate it to the 4G core, if I’m not mistaken.
[Leo] Yes, you’re right.
[David] So there’s different challenges for different operators in different regions. I will say though, conceptually, it would be fantastic for an open community to work, whether it’s O-RAN or Open RAN.If someone can make it work, and it is possible, then that’s fantastic. I think it would be a benefit for everyone. But right now, I think it’s going to take time. And the good news is, I think it’s a great opportunity for new players, new companies to get involved and help with this problem. Help with the deployment of a network, help with the automation problem, help with the management problem. I mean there’s no time in our history, I mean, this is sort of the last frontier. We saw it with OpenStack with your classic IT workloads but now it’s starting to spill into the mobile networks.
[Leo] Yup. And actually, if you look at the Open RAN situation globally, there are two, we can say, tier 1 operators: there are only two tier 1 operators that actually deployed the network. One is the Dish networks (in US), another one is Rakuten (in Japan). But if you look at both, they are both greenfield operators. So they are building the 5G network only. They don’t have the legacy. For all those traditional operators, since they have huge legacy networks, if they want to use Open RAN, the problem is that they have to do interoperability testing between the Open RAN 5G solution and the legacy 3G/4G solution. That means for those small equipment vendors, they (will) still have to deal with Ericsson, Huawei, and ZTE. (But) they don’t have any reason to help them. Because they’re ‘sharpening the knife’ for myself? I (wouldn’t) do that. [laugh]
[David] [laugh] Right, right.
[Leo] So somehow the operator also needs to figure out how to convince those legacy equipment vendors to work on this kind of thing, right. How to do that? I don’t know. It may be really challenging.
[David] It’s funny how you say the sharpen the old knife here. [laugh]
[David] If you were to step back-
[Leo] That’s the reality right?
[David] It is, for sure. The Ericsson’s, Huawei’s, Nokia’s, you step back and look: Why would they help. I mean I’m sure they have their reasons and I’m sure they have many different schemes in mind. If I were to look at again, taking the OpenStack example, you have someone like a RedHat that takes a certain distribution and makes sure that they can support it and sell it to enterprises and telcos. So there’s an example of, let’s say an integrator that figures out what to do there. And I imagine there’s going to be someone similar here. And then similarly, I think a lot of people in that same space are turning to the Googles and Amazons of the world because you just cannot develop and manage as quickly as they can. So at the end of the day I think there is certainly opportunities coming forward in the future. It’ll be an interesting time for sure.
[Leo] Mhm, yup. And another factor will be this: Because I know all operators, they have been using the OpenStack software for a long, long time, I think 10 years right? Like RedHat. So they can do it this way right, RedHat, the software itself is free. For example, for personal use, I can download RedHat Linux online and I can install it by myself, I can do it by myself and everything. Take the operator in Canada, I know a lot of them have been using this for years, but at the same time they purchase the service from RedHat, that’s also very expensive as well. Although the software itself is free, how many dollars they spend purchasing the service from RedHat, and how many resources they spend internally. Training, whatever, how many engineers they spend on this OpenStack stuff. They can compare the costs.
[David] For sure, I feel like we’ve seen this movie before. You know, it first started with IT workloads and now this. And my sources tell me, I believe that really the only big players in OpenStack now are probably in telcos. I don’t think any of the major enterprises, and there may be a few, are playing in the space. They’re just going straight to the major cloud providers right now. I think they’re going to have a nice little moat for those types of things and who knows what’s going to happen now with the RAN, but we’ll see.
[Leo] It’ll be a very, very similar situation.
[David] I think so too.
[Leo] If we use Open RAN solution, yea for sure you’ll save a lot of money on hardware or maybe the equipment itself. You save money there, but at the same time you jack up a lot of costs on the service you need, integration or maintenance or this kind of thing. Finally, you combine both numbers: capex and opex, probably it will be similar. If it’s really similar, then why should we go to Open RAN right? We’ll just stay with the existing equipment vendor that’s very comfortable. The costs will be similar, what’s the difference? There’s no point.
[David] Right, and then of course there’s the security dimension that also needs to be played out but listen Leo, I wanted to thank you for taking the time today. I think it was a pretty enjoyable conversation.
[Leo] And another thing you’ve probably realized right, I think a few months back, Nokia joined the Open RAN forum.
[David] Oh, interesting.
[Leo] The reason I observe, I think, Nokia lost a huge opportunity in China for the RAN, right? They lost all three major operators there: China Mobile, China Telecom, and China Unicom. They got zero RAN business. That’s one reason, and second, I think last month, they lost Verizon in the US. They lost to Samsung. That is probably the major reason why Nokia joined the Open RAN. They’re kind of behind their competitors like Ericsson and Huawei, I guess that’s part of the reason, for sure. People in Nokia won’t say that – (but) that’s my observation.
[David] No, well, those appear to be clear facts and thank you for bringing that up before we come to a close today. I think that’s a very interesting fact in the industry that’s come about. Ok, Leo, I wanted to again thank you for your time, thanks for chatting, and I think we’ll definitely do this again. This was a fun little discussion.
[David] Ok, thanks so much Leo. Take care.