The RAN market makeup has been relatively the same for some time. The three largest vendors—Ericsson, Huawei and Nokia—have had a combined market share of 75% or greater since Nokia’s acquisition of Alcatel-Lucent. This year, the combined share of the big three was nearly 80%. This leaves the likes of Samsung, ZTE, NEC and others fighting over the remaining 20%. But that could be changing.
Introduction of new technologies creates opportunities for new groups of vendors to enter the market and gain share. Samsung provides an example of this. The company identified 4G, both LTE and WiMAX, as an opportunity to make a stronger push into the wireless infrastructure market. While the company hasn’t jumped into the top three of the market, it has gone from being a curiosity to a significant vendor in several markets. Samsung also shows the importance of taking the long view. Operators like to test the water with new vendors before turning over significant portions of their networks to them. Samsung proved its bona fides in LTE with small cell wins and other select macro network wins. Now as the market shifts to 5G, Samsung has positioned itself for further growth in the U.S. and in other leading edge 5G markets.
Obviously right now the market inflection points that could change vendor makeup are 5G, along with open and virtualized RAN. At this month’s London TIP Summit, Telefónica and Vodafone announced Open RAN pilot deployments with Altiostar, Mavenir and Parallel Wireless. The markets chosen for these pilots are Turkey, Latin America and Africa. None of these are exactly the most visible markets within those operators’ portfolios, but that isn’t a surprise either. Verizon brought in Samsung for enterprise small cells before turning to the vendor for its own Open RAN project and 5G FWA network. But these pilot programs are where change starts.
Change won’t happen overnight or even within a year. It will take time. Mobile operators are already starting to select their initial 5G radio partners. I seriously doubt any of the RAN market disrupters are going to land a significant share of any major operator’s initial 5G build. However, as 5G matures and operators start thinking about upgrades and enhancements to their networks, this is where those early pilot programs can start to pay off and change the RAN market configuration. Mobile operators moving slowly isn’t going to change any time soon.
To get mobile operators to pivot toward market disrupters, those disrupters will have to bring something to mobile operators the entrenched three don’t offer. Performing just as well for a few dollars less won’t be enough. There must be notable performance improvement along with cost savings. A bigger issue is trust.
These disrupters must build trust with mobile operators before those service providers turn over one of the most important parts of their networks to those vendors. Building trust will include proving they can scale to manage a large network project, are reliable and have long-term prospects. Trial deployments help some here. Being a solutions provider, not just a product provider, helps as well.
Mavenir has tackled the solutions provider challenge by launching its Open RAN Ecosystem. The ecosystem pulls together an end-to-end solution using Mavenir’s own radio and core assets along with those of its partners. This broadens the network options Mavenir and its partners can offer. Mavenir has also taken on the responsibility of network integrator.
Operators generally don’t single-source their mobile networks, but it does strengthen a vendor’s position if it can offer an end-to-end network. At a minimum it shows the vendor has a deep understanding of the full mobile network and isn’t just a specialist addressing a single domain or deployment type. It also expands the vendor’s prospects as it now has multiple entry points into the operator’s network.
For a market that has shown mainly consolidation since the early LTE days, it is refreshing to see new vendors wanting to take on the RAN market challenge. It won’t be easy to unseat the big three. It could take a decade, and not every new entrant will survive. However, mobile operators should be pleased that their choices are once again expanding and not contracting.
Daryl Schoolar is principal analyst of wireless infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at [email protected] and follow him at @DHSchoolar.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.