I don't think the O-RAN Alliance has a future

Here’s why we need to look at the gaps in 2G and 3G specs, the comparison with 3GPP, and its relevance to India which is predominantly a 2G-3G and affordability-based market - before we dance to the drum-roll about Open-RAN. A view from a bold Telco-analyst’s magnifying glass which believes that despite the word ‘Open’, it is not open source or open

He founded Strand Consult in 1995 and for about 20 years, this team has been reading the tea leaves in the telecom industry with annual predictions on how technology would evolve. As John Strand, CEO of Strand Consult proudly claims, Strand Consult was the first to describe the 3G market and South Korea’s pivotal role in mobile services, and the one who predicted that the celebrated iPhone would not increase shareholder value for mobile operators (the report The Moment of Truth – A Portrait of the iPhone from 2009 earned John Strand a global reputation as a fearless critic of the behemoth and conventional wisdom). In his reckoning, in the past, telecom providers enjoyed a measure of permission-less innovation in their product and service development, but no longer. Without mincing any words, Strand opines that the telecom industry has become a target of rent-seeking by policymakers and its digital competitors that use regulation to gain an unfair competitive advantage.

His aim is to bring transparency to expose abuse of the political and regulatory process by self-interested actors whether multinational companies or greedy city mayors. For instance, in Denmark Strand Consult led the effort to improve the policy for mobile coverage and deployment – leading Danish mobile operators to reduce rental cost on their installed infrastructure base by 20 percent, as John professes. He also cites how in the European Union, he has exposed the lack of transparency by the Body of European Regulators for Electronic Communications (BEREC), a regulatory oversight group chartered by the European Commission which holds secret meetings with pre-selected stakeholders on controversial policies while claiming to work in an open fashion. This team also feels that it has been an effective critic of the EU’s Roaming Like At Home (RLAH) policy and exposed that policymakers did not conduct proper legal, economic, or operational analysis in the imposition of price controls. Strand Consult’s research notes prompted the European Commission to adopt a fair use clause for the policy and have allowed some firms to exit the harmful regime.

So he is the best person to ask what’s wrong, what’s right, and what can be done to improve the Open RAN direction. As he utters boldly- we only have one goal and that is to create the transparency that others are fighting against.

Let’s understand this better through this interview with John Strand, as affable and as candid as a child, but with the mind of an industry Grandmaster.

The interview would be incomplete without talking about your report “Debunking 25 Myths of OpenRAN” . What stood out for you when you finished this report?

This report takes a critical view of the claims made about OpenRAN, including the claim that OpenRAN will stimulate the 5G service market. Strand Consult doesn’t believe OpenRAN will stimulate the 5G service market. We understand which services there will be in the core network and which in the cloud. The key problem for OpenRAN community is that they can’t explain which services are based on RAN that requires OpenRAN on a cell site to be implemented. And the OpenRAN community cannot tell us who will develop these OpenRAN-based services, who will sell them, what business models underlie these services, and whether they will address the corporate or consumer market. And they cannot tell us whether these services only be available on the few mobile sites where the operators have implemented OpenRAN, e.g. outside the big cities.

Why is Open RAN being criticized for being fake, for not really open, and for being complex?

Look at the facts, The O-RAN Alliance develops technical specifications for 4G and 5G RAN internal functions and interface, not for 2G and 3G. The O-RAN Alliance is not a standards development organization (SDOs) like the 3GPP which is a global partnership between seven regional SDOs. The OpenRAN boxes are propertarian technology, despite the word, Open is not open source or open technology.

At the same time, The O-RAN Alliance does not satisfy the openness criteria laid down in the World Trade Organization Principles for the Development of International Standards, Guides, and Recommendations. The ORAN Alliance is a closed industrial collaboration developing technical RAN specifications on top of 3GPP standards.

Please elaborate.

Look- 3GPP was formed after 2G (GSM) was developed; this means that 3GPP did not develop 2G but rather that 3GPP ensured backward compatibility for the prior generation. Note that 3GPP standards define the technical specifications for a complete mobile cellular network 2G/3G/4G/5G end-to-end.

This is the brutal reality that OpenRAN infrastructure providers will face.The notion of vendor diversity for its own sake challenges operators to reduce complexity and cost in their networks. Operators frequently reduce the number of vendors to improve security (ability to vet vendors and develop trusted relationships) and to lower cost (ability to secure volume discounts). Note how Neil McRae, Managing Director, and Chief Architect at British Telecom described when he got the question; “The major operators have been telling their shareholders since 2000 that they should reduce suppliers to save money?

 The total value of the global RAN market is less than $35 billion annually. That figure should be analyzed in comparison to the global mobile CAPEX of $170 billion. The RAN figure can also be studied in relation to annual revenue per user (ARPU). As such, RAN represents less than three percent of the operators' total ARPU. Put it in relation to the operators' sales and marketing and prepaid top-up costs, then the RAN costs are de minimis.

Do we really need Open RAN? And if so what’s the right formula to go about it – for both Telcos and for Vendors?

What you and other journalists may experience is that the O-Ran Alliance is not available when you send critical questions. I've spoken to a lot of journalists who refer to the OpenRAN movement with near-religious fervor and they shrink from asking critical questions. Strand Consult’s customers are mobile operators (and their board of directors) which want the truth. Strand Consult is pleased to create the transparency that others fight against.

I believe in the future the O-RAN Alliance future likelihood gets dissolved or abandoned as the de facto organization for open RAN spec development? Continued Western government interest and support in open RAN would surely halt or demand change if the amount of influence Chinese state-owned companies have in the O-RAN Alliance was more broadly understood and questioned. What should happen and what is most likely to happen with this respect to these conflicts?

I don't think the O-Ran Alliance has a future. What you refer to as innovation and what creates openness in the industry already happens in 3GPP. The O-Ran Alliance sets the standards for the "proprietary USB cables" that bind the proprietary boxes together. 3GPP has already launched over 100 interfaces that create open networks. I believe that the O-Ran Alliance will be swallowed up by 3GPP. The notion that mobile operators' dreams can control and veto technological development does not have a future.

How does this correspond to the current geopolitical shake-up in the Telco space especially?

Many present OpenRAN as the solution to replace Chinese suppliers and one of the arguments I often hear is that there are as many Chinese suppliers involved in 3GPP as there are in the O-Ran Alliance. The big difference between the O-Ran Alliance and the 3GPP is that in the O-RAN Alliance there are some players including China Mobile which have a veto that does not exist in 3GPP. Beyond that, there's full transparency in the 3GPP that's not there in the O-Ran Alliance. More largely, policymakers have not asked 3GPP to be the solution to national security concerns with China. But the US OpenRAN Policy Coalition (not the Alliance) asserts one of its value propositions as being a competitor to Huawei and the need for security, “supply chain diversity”, vendor diversity, etc.

The fact is that some of the O-Ran Alliance's members are on the U.S. Entity List, and when you look at the Chinese involvement (chair and vice-chair) in the various commissions of the O-Ran Alliance, it is clear many of the companies in the United States consider a threat to national security and that have close relations with or that are owned by the Chinese regime have a central role in the O-Ran Alliance.

That explains some recent pause buttons and the Huawei factor, then?

For those who are ok with China's record on human rights and its geopolitical behavior, then there is not a problem. If like me, you have a view on human rights and how China wants to influence the free world through technology, then there is a problem. The lack of transparency O-Ran Alliance combined with China Mobiles (chair and co-chair) veto rights is a big problem.

It is important to remember that the O-Ran Alliance was formed in 2018 by uniting two earlier organizations covering different parts of the world – the US-based xRAN Foundation and China-based C-RAN. If they disapprove of the Chinese part, then it is like making a divorce with all its challenges. It is also important to remember that the OpenRAN players initially had success in marketing the O-Ran Alliance and OpenRAN as an alternative to Huawei. It has given them a lot of tailwinds for a time. However if one reviews the O-Ran Alliance organization structure, it is clear that the Chinese have a prominent role. The fact is that there is limited transparency in the O-Ran Alliance, and it does not meet the transparency requirements established by the WTO for standards development organizations (SDOs).

What should India read into all this? How should we translate these factors into our roadmap?

 It is important to understand that big parts of India is a 2G/3G market. Millions of Indians today and in the future will still use phones that only support 2G and 3G. In fact, the most widely used network technologies in India today are 2G and 3G. Many emerging countries are behind to roll out 4G, (I know that parts of India have ok 4G coverage on sites there support 2G/3G and 4G on one base station) and the number of countries in emerging markets that have rolled out 5G is still quite limited.

OpenRAN and O-RAN are a 4G/5G technology. They are not solutions that can replace existing networks in India 1 to 1. It is not a technology that can substitute 2G and 3G. It is not the solution for low income people in India.

By Pratima H