Research Notes

OpenRAN at Mobile World Congress 2022 – a Review by John Strand

I have attended the Mobile World Conference (MWC) for almost 25 years, interrupted only in the last two by Covid-19. I have attended as the mobile generations have increased from 2G to 5G. Year after year, Strand Consult has provided pre and post reviews of the event.  Here’s the archive.

Vendor diversity is the big thing right now, making oneself less dependent on countries like China and large suppliers. It is a complex debate. Given the supply shocks experienced from the Russian invasion of Ukraine, this is likely to accelerate supply chain diversification efforts vis-à-vis China. There wasn’t much focus on vendor diversity across the supply chain in Barcelona this year. What was most focused on was vendor diversity in relation to the RAN and that despite the RAN costs making up about 3% of the mobile operators’ ARPU. 

Everyone talks about OpenRAN; no one buys it.

GSMA worked at MWC hard to put focus on OpenRAN, but industry still grapples with the big challenge that OpenRAN is something operators test and talk about but not something operators buy. If you attended the OpenRAN events at MWC, it was “The Usual Suspects” who reused the arguments they have used for the past two years. We’re talking about people who referred to testing agreements with operators as commercial agreements. When you hear smaller players like Mavenir and Parallel Wireless, it is clear that they are panicking that they are not getting the orders that they have probably promised their boards. It is very easy to see through a salesperson who has difficulty achieving the sales results that are expected of him.

After some years, OpenRAN has yet to notch a major commercial success. If OpenRAN 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 (installed base). It looks like OpenRAN is too little, too late to make a difference in a world in which operators are 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 sent all the savings to the customers, then an average American mobile customer could save 40 cents a month. 

Many OpenRAN proponents and policymakers claim that there are just 4 infrastructure suppliers to mobile networks, as if Huawei, Ericsson, Nokia, and ZTE were the only choices for equipment. Maybe these people can’t count, or they have never walked around the MWC exhibition halls where there are some 2000 infrastructure providers. It’s as if those who know the least about the industry talk the most about OpenRAN.

Rakuten charismatic CEO Tareq Amin and its Symfony solution got attention. Rakuten may have a large symphony orchestra, they have a hard time selling tickets to their concerts. If you look at their ability to attract customers in Japan then it is a commercial disaster and their best-selling point for data has been free telephony and data for up to 12 months.

When Johan Wibergh from Vodafone says they want OpenRAN on 30% of their sites by 2030, the math doesn’t work unless they slow down their 5G rollout. Globally some 200 5G networks have been launched in over 70 countries and classic 5G are moving fast.

OpenRAN players could have opened the conversation by addressing the many unanswered questions from Strand Consult and others, including the financial, economic, technical, and practical points about the technology. This is particularly evident at many OpenRAN webinars over the last 24 months when Strand Consult posts its questions publicly in the chat and the moderator ignores the questions, or Strand Consult’s emailed questions to the event organizer are ignored.

As GSMA is unwilling to facilitate these discussions, check out this IEEE’s event John Strand spoke at two weeks ago: OpenRAN and Private 5G – New Opportunities and Challenges  It is probably the first OpenRAN event to relate objectively to the roadmap that is ahead of OpenRAN. Unlike the many other free OpenRAN events that are held, this event is not sponsored by OpenRAN players and unlike the other events, it is not purged of critical questions.

A highlight of the OpenRAN part was the event Security Summit: 5G Network Diversification and Supply Chain Security.

It featured former Federal Communications Commission Chair Tom Wheeler who asked about vendor diversity only being about RAN or whether to look at other parts of the value chain as well, including the number and size of cloud vendors including on AWS.

At the same event Ian Levy, Technical Director, of the UK’s National Cyber Security Centre  who sat seriously among 2,000 exhibitors and said there were only 4 infrastructure providers in the mobile market. How should the other 1996 exhibitors feel when government official use industry talking points for their security policy. Certainly citizens should not feel safe when the security officials cannot correctly separate real world threats from advocacy.

From the US was Jaisha Wray of National Telecommunications Information Administration. Her job is to peddle OpenRAN to other countries. It’s doesn’t seem like the sales effort is working, but Huawei is gaining ground in her territory. To learn more read the CSIS report Huawei’s Global Cloud Strategy Economic and Strategic Implications and other similar studies documenting Huawei’s rise.  Strand Consult’s Peru-born associate Silvia Elaluf-Calderwood describes Huawei’s rise in cloud, the fastest in LATAM in fact, and its threats to US and EU security and human rights. See in English and Spanish.

It is important to understand that OpenRAN and O-Ran are a 4G/5G technology. They are not solutions that can replace existing networks in big parts of the world 1 to 1. It is not the solution for low income people in India, Africa, Latin America etc. These markets will remain for some years, particularly in emerging countries in which purchasing power does not yet justify the 5G investment.

GSMA predicts that even by 2025 there will still be a substantial 2G and 3G penetration in several regions. In Asia Pacific GSMA predicts that there are 14 percent 3G phones and 7 percent 2G phones in 2025 totaling 21 percent of the market. In Latin America GSMA predicts 21 percent 3G phones and 5 percent 2G phones in 2025 totaling 26 percent of the market. In sub-Saharan Africa GSMA predicts that there are 58 percent 3G phones and 12 percent 2G phones in 2025 totaling 70 percent of the market. Overall, there will be over 1 billion 2G and 3G customers by 2025 who do not have a phone that supports 4G or 5G. In many emerging countries, most people will continue to use 2G and 3G for years, they can’t afford a 5G phone. In India are we talking about hundred of millions people.

The bottom line is that OpenRAN / O-RAN are not technologies for hundred of millions of people  today and tomorrow. Another question is whether mobile operators want to replace existing 4G equipment and establish a set of parallel base stations, for example one set running 2G/3G and another 4G/5G OpenRAN. Note that the rental cost (to tower compagnies) for sites and energy consumption is already high and would be even higher with a second network on the same site.

Globally some 200 5G networks have been launched. With the exception of Raktuten, all of them have been built with classic 3GPP RAN, not OpenRAN. No mobile operator supports the view that OpenRAN is a 1:1 alternative for classic RAN. It may be some 3-5 years before OpenRAN takes hold.

I Strand Consult´s report “Debunking 25 Myths of OpenRAN” we provide the objectivity and transparency needed by decision makers. This is the sort of information and analysis which is not available in most mainstream outlets and events. At the end of the day, mobile operators’ job is to deliver a great network experience to their customers. OpenRAN proponents have not succeeded to communicate, let alone demonstrate, specifically or empirically the difference they will make to mobile operators’ bottom line in a world where 200 commercial 5G networks on classic RAN have been launched.

For more than 25 years, Strand Consult has debunked the many myths of mobile industry hype. With its free report “Debunking 25 Myths of OpenRAN”, Strand Consult provides valuable information to mobile operators, investors and other mobile industry stakeholders.

Contact Strand Consult today to get your free copy of the report “Debunking 25 Myths of OpenRAN”,

Request the free report.