Mavenir raised another $155 million in capital, bringing its total raised since July to $250 million.
The latest round of financing includes existing investors Siris and Koch Strategic Platforms, a subsidiary of Koch Industries.
“They’re stepping up to do more,” said Mavenir President and CEO Pardeep Kohli. He said part of the funds will be used for working capital so that Mavenir can plan for the supplies it will need, for example, a year from now.
Mavenir was founded in 2005 and built a business out of supplying solutions for messaging and voice serves like VoLTE. About six years ago, it started looking at the open Radio Access Network (RAN) space.
It’s been among the leading voices advocating for more open interfaces so operators can mix and match network equipment from different vendors rather than being locked into deals with Ericsson or Nokia.
“It’s been a good journey,” and the company now employs about 6,000 people, Kohli told Fierce.
That’s up from about 3,200 people in March of 2020. This past summer, the company made some adjustments to “reorient,” he said, which meant letting some people go and hiring other people more familiar with deploying radios to help grow that market.
It also needs to hire people in the geographic locations where it’s deploying equipment. “A lot of this is just project management,” he said.
The company is profitable and growing, he said. Its packet core business has grown almost 10 times in the past few years. In 2020, it was less than $10 million and last year, “we did over $100 million,” he said. “This year, we expect to grow further.”
In 2020, Mavenir proposed an IPO but then decided to postpone those plans due to market volatility.
The way open RAN has been progressing means the burden of putting it all together either falls on the operator, like the case with Dish Network, or a systems integrator. Most operators aren’t used to doing it all themselves.
“That’s the shift which I think we are making now,” Kohli said. “We will actually put it together and offer it as one turnkey solution to the customer.” It’s still based on open RAN and there’s nothing proprietary about it, but it’s more suited to the way customers are accustomed to working with traditional vendors, he said.
Mavenir is getting some business from operators that need to rip out Huawei gear and replace it with equipment deemed secure by the U.S. government. Last year, Mavenir signed a contract with Triangle Communications in Montana to swap out Huawei gear and replace it with Mavenir’s fully virtualized open RAN and Evolved Packet Core (EPC) network.
Early days for open RAN
By creating specifications through organizations like the Open RAN Alliance, companies like Mavenir are making it possible for more vendors to compete and for operators to have more choices when it comes to the products they use in their networks.
But not everyone is convinced open RAN is going to be around for the long haul. Layoffs at Parallel Wireless this past summer sparked another round of doubt about the market after CEO Steve Papa cited the slow progression to open RAN as one of the reasons for scaling back.
In general, the open RAN market has come a long way in just a few years, with revenues accelerating at a much faster pace than most everyone expected, surprising both skeptics and proponents, said analyst Stefan Pongratz, VP at Dell’Oro Group, via email this week.
At the same time, the original vision that open RAN is mostly a new architecture for the non-traditional suppliers is morphing, he said. According to Dell’Oro’s estimates for the first half of 2022, Samsung, Fujitsu and NEC collectively accounted for about three-fourths of the open RAN market while suppliers like Mavenir, which it ranks at No. 6, Parallel Wireless (No. 8) and Altiostar/Rakuten together comprised less than a fifth of the market, he said.
“In retrospect, open RAN revenues have probably accelerated a bit faster than expected while the share gains by the non-traditional suppliers have advanced at a slower pace than anticipated,” Pongratz said. “With open RAN still accounting for <10% of the overall RAN market, it is still early days and it is not too late for the ‘smaller’ suppliers to turn things around. But clearly the clock is ticking, especially for the ones without non-RAN assets.”
Meanwhile, he said one of the principal questions with open RAN remains unchanged: Can open RAN deliver the same performance, energy consumption and total cost of ownership (TCO) as traditional RAN in some cases? Though it is still too early to tell, preliminary indications from both Japan and the U.S. are promising, he said.
When it comes to open RAN’s role in the broader RAN toolkit, the primary objective of operators and enterprises is to work with the suppliers and partners that can deliver the best performance and TCO, he said.
“Open RAN is clearly already part of this toolkit but at the same time, both proprietary and purpose-built RAN will continue to play important roles for the foreseeable future,” Pongratz said.