Ericsson's and Nokia’s responses to the industry’s open RAN initiatives are strikingly dissimilar, and it seems to be working to Nokia’s advantage.
Both are among the vendors that have been accused of creating a stranglehold over the RAN market for the past 15 years or so.
But compared to Ericsson, Nokia is being far more aggressive about its response to open source, going so far as to say that it sees xRAN as a way to differentiate against its competitors. Nokia’s seen the writing on the wall and it chose to join the open source movement rather than get left behind, enabling carriers to use other vendors’ gear alongside Nokia’s.
None of this is new, but last week’s O-RAN Alliance news invited a new round of speculation about open RAN prospects. The O-RAN Alliance added seven new members and announced an initial set of seven working groups.
AT&T is a founding member of the O-RAN Alliance, along with China Mobile, Deutsche Telekom, NTT DoCoMo and Orange. New members include Bharti Airtel, China Telecom, KT, Singtel, SK telecom, Telefonica and Telstra.
Of course, Verizon is missing from the ranks, which is notable because it’s a member of the related xRAN forum. A Verizon spokesperson said last week that the operator remains committed to Open RAN efforts and is waiting to see final governance documents from the O-RAN organization, which are still under development. A Sprint spokesperson also confirmed Sprint is a member of the xRAN Forum and plans to join the O-RAN Alliance. A T-Mobile spokesperson was not immediately available.
Ericsson previously had no public statement on the O-RAN Alliance, but last week, it acknowledged that it is supportive of emerging discussions around future RAN architectures and new open interfaces proposed for 5G.
“The O-RAN Alliance is one new initiative creating a platform for these discussions and Ericsson is working to evaluate the best way for us and the wider telecom ecosystem to work with this new alliance,” Ericsson said in a statement. “As always, we are in continuous contact with our operator customers and other stakeholders in the industry, including the ones currently associated with the O-RAN Alliance, to make sure we continue to make the right products that make operators successful in their markets and satisfy their end-users’ needs in the best way possible.”
None of this may come as a surprise because generally speaking, Nokia has been more aggressive about trying to increase its RAN market share. In the small cell market, for example, Ericsson was accused for a long time of resisting the small-cell movement—which was expected to boom a lot sooner than it did but is still expected to be a big part 5G.
Ericsson did come out with the Radio Dot to penetrate enterprises, but when it comes to outdoor small cells, its portfolio is more about micro radio units rather than standalone small cells—meaning Ericsson is better positioned to defend its existing macrocell footprint than to penetrate new accounts by putting its small cells in another vendor’s macro footprint, according to Ed Gubbins, senior analyst, Global Telecom Technology & Software at GlobalData.
Nokia, meanwhile, has repeatedly demonstrated examples of its small cells being deployed in other vendors’ macro footprints. It clearly wants to try to gain RAN market share that way, and that contrast has been going on between Ericsson and Nokia for a while.
“Against that backdrop, when you look at the O-RAN movement, it’s not as surprising to see Nokia again more interested in disruption to gain market share and Ericsson more conservative to protect market share,” Gubbins told FierceWirelessTech.
What’s a bit surprising about that is Ericsson has lost some market share in the past few years, he added. Maybe at some point Ericsson might switch and focus less on protecting its own turf and more on taking away others’ share, but for now it seems to be operating under the practices that have been familiar to it for a long time.
Indeed, Ericsson earlier this year said it was watching the open RAN and open source movement from the sidelines but preferred at that time to work on industry standards through groups like the 3GPP. It wasn’t particularly interested in jumping into the fray of open source projects, of which there are many.
Gubbins said he does think RAN vendors, including Ericsson, are going to have to work with operators on this movement at some point.
“You can see the list of major operators participating in this movement growing quickly,” Gubbins said. Considering what happened to ZTE this year and the risk to operators that have deployed ZTE’s gear, the reduced competition in the market when ZTE’s not active—"it demonstrates again that operators have good reason to want a more diverse and competitive RAN vendor landscape where the balance of power shifts more toward operators and away from vendors.”
One operator doesn’t have the power to dictate what a handful of base station vendors are going to do, but if a large number of operators get together? They can leverage that to force OEMs to provide what they want. When all is said and done, it’s going to be very interesting to see just how many operators join the O-RAN Alliance—and how much power they’ll yield. — Monica | @malleven33