The U.S. may not have a radio access network (RAN) vendor the size of Ericsson, Nokia or Huawei, but it does have some vendors that are on the cutting edge of next-generation RAN technology and that are garnering global clients. Altiostar is one of those vendors. It today announced that Telefonica Ventures has invested in Altiostar, and it’s likely Telefonica will use Altiostar’s virtual RAN technology in its European and Latin American 4G and 5G networks.
Telefonica Ventures joins existing investors Rakuten, Cisco, Qualcomm, Tech Mahindra and Fidelity. Representatives from all these investors (except Fidelity) will form a new technology advisory committee at Altiostar.
Altiostar is not disclosing the amount of Telefonica’s investment. But Thierry Maupile, Altiostar’s EVP of strategy and product, said the investment is not huge compared to some of its other investors, partly because Altiostar is fully funded. “We are starting to generate cash from operations and will break even before we need to raise more money,” said Maupile. According to CrunchBase, the company has raised more than $350 million.
Of more importance to Altiostar is the fact that Telefonica plans to become a strategic partner and likely use the vendor’s technology in its networks. Also significant is the fact that Telefonica would be the first major carrier to use Altiostar’s technology in a legacy network.
Greenfield versus brownfield
Altiostar first garnered attention for its work with Rakuten. The Japanese company is building a greenfield 4G network in Japan, which it plans to convert to 5G in mid-2020. Altiostar is among a gang of vendors helping Rakuten build a fully virtualized, cloud-based wireless network.
But in Telefonica's case, the Spain-based operator is a large company with legacy wireless networks across Europe and Latin America. And it’s much harder to introduce next-generation technologies in brownfield environments. “Telefonica has concluded that this open vRAN is critical for them even as a traditional operator with a legacy network,” said Maupile.
Besides Rakuten and Telefonica, Altiostar also counts some smaller carriers as customers, including Alaska’s GCI, Telecom Italia, and Telcel in Mexico. Maupile said the vendor is also working with some other early adopter operators that it can’t name, yet. “Rakuten has caused very strong interest from other operators to embrace the open vRAN benefit,” he said.
Even Dish Chairman Charlie Ergen has expressed interest in emulating Rakuten’s experience, building a 5G network that’s virtualized and cloud native. Maupile said Dish would be a prime candidate for this type of next-gen network: “They have no legacy in a mobile network. They have a lot of spectrum. They have fiber in all the key markets. They want to have an open architecture for sure. They have launched their RFP.”
According to Maupile, Telefonica has also issued RFPs for new radios, software, servers and services. The Altiostar technology is used to virtualize all the functions of the baseband: Layers 1, 2 and 3. And the baseband unit can be split into virtualized distributed units (vDUs) and virtualized central units (vCUs).
Mavenir, which competes against Altiostar in the vRAN market, also has a commercial relationship with Telefonica. Mavenir’s OpenRAN technology enables remote radio units (RRUs) from any vendor to interface via Ethernet fronthaul with baseband units built on commercial off-the-shelf equipment. The interface is made possible with open source O-RAN software that rides over the fiber connecting the RRUs with the baseband unit.
Of Telefonica’s RFP, Maupile said that opening up the RAN allows carriers to buy from a variety of vendors. In fact, escaping vendor lock-in is one of the primary goals of open networking. "The procurement is going to be very different,” said Maupile. “They don’t buy everything from one vendor.”