AT&T’s public proclamation earlier this month that it plans to begin deploying open radio access network (RAN) components into its 5G network was a significant boost for the open RAN ecosystem, which spent most of 2023 battling significant headwinds.

AT&T was not the first to jump on the open RAN bandwagon as a number of greenfield operators have tapped the architecture to power their nascent 5G networks, including Dish Network in the U.S., Rakuten Mobile in Japan and 1&1 in Germany. AT&T also wasn’t the first established (brownfield) operator to announce open RAN plans, as Vodafone, Deutsche Telekom and NTT DoCoMo have all started to move in that direction.

But, the AT&T move was significant in that the carrier announced a significant financial investment – up to $14 billion – and put down significant deployment goals: to have 70% of its wireless network traffic flowing through its open RAN platform by the end of 2026. More importantly, AT&T’s decision put a positive spin on the open RAN space, which teetered throughout the year.

Here are some of our top stories from the past year chronicling the highs and lows of the open RAN market.

FCC backs open RAN for security

Federal Communications Commission (FCC) Chairwoman Jessica Rosenworcel during a speech early in the year touted open RAN as a way for U.S. operators to circumvent network equipment from China-based vendors like Huawei and ZTE.

Rosenworcel told attendees during a speech at a Center for Strategic and International Studies event that open RAN technology provides operators with greater access to more secure networking equipment. However, funding needed for rip-and-replace programs to support these open RAN efforts remained a challenge.

“This effort is now underway, though completion by carriers depends, in part, on further funds from Congress for the reimbursement program – and that is key,” Rosenworcel said. “When we set up this reimbursement program, we also made clear this was an opportunity for carriers to transition to open radio access network systems. In the long run, these systems can help diversify the technology in our networks and grow the market for more secure 5G equipment.”

Telecom operators tout open RAN testing, maturity

Telecom giants Vodafone and NTT DoCoMo suggested operators and vendors remain diligent in their open RAN testing environments to stay ahead of challenges in tying together the end goal of seamless interoperability between a diverse network ecosystem.

The pair’s suggestions were part of a white paper that was an initial peak into their a collaboration targeted at streamlining open RAN testing.

Vodafone was also part of a European-centric telecom group that released another white paper highlighting open RAN advances in meeting challenges tied to maturity, security, and energy efficiency.

T-Mobile US open to open RAN

Neville Ray, president of technology at T-Mobile US, explained during a one-on-one interview at the MWC Barcelona 2023 event that the carrier’s lack of open RAN depth was due to timing. He explained that the technology lacked maturity when the carrier kicked off its expansive network upgrade program.

“For us, we didn’t go down on open RAN path when we made our big vendor decisions three years ago,” Ray said. “The pace and scale that we were moving on, features and capabilities we needed, the ecosystem just was not ready. And the O-RAN guys will tell you that.”

However, Ray did preface his comments by stating, “I think the ecosystem’s maturing.”

“We’ve made massive investments into single RAN in our network environment, and it’s not like we’re repeating that soon,” Ray said. “But clearly, we’re evaluating continually open RAN opportunities. We believe that the ecosystem will be stronger with open RAN. But there isn’t a deployment thing that T-Mobile US is doing now.”

Open RAN market drags

Dell’Oro Group found the open RAN market began to slow during the year, including a year-over-year slowdown in growth during the first quarter and the first sequential drop in revenues during Q2.

“After a couple of years where open RAN revenues exceeded expectations and advanced at an accelerated pace, the current slowdown doesn’t come as a surprise,” Dell’Oro Group VP Stefan Pongratz wrote. “Projections for 2023 were more tempered, considering that it would take time for the early majority operators to balance out the more challenging comparisons with the early adopters who fueled the initial open RAN wave. This is the trend we are witnessing now – growth decelerated in the first quarter and declined in the second quarter.”

Open RAN loses a high-profile backer

Rakuten executive Tareq Amin left the Japanese operator and platform provider, taking with him a legacy of leading that firm’s innovative open RAN development and deployment.

Amin has been a long-time backer of breaking up the legacy RAN stack, dating back to his days at India-based operator Reliance Jio. He joined Rakuten as CTO in mid-2018, spearheading that operator’s innovative open RAN-based network plans.

Specifically, Amin headed Rakuten’s mobile division, which launched in early 2020. The carrier entered the densely penetrated Japanese mobile market as a fourth competitor against established rivals NTT DoCoMo, KDDI and SoftBank.

Rakuten Mobile, led by Amin, took a different tack by deploying a virtualized network architecture to support its initial 4G LTE and eventual 5G service. The network launch included several high-profile technical challenges, but eventually hit an operating level of maturity.

Operators continue to question open RAN interoperability

Despite progress, operators continued to question the maturity and interoperability of open RAN systems.

Verizon network executive Joe Russo told SDxCentral during an interview that Verizon has been very aggressive in deploying an underlying virtualized RAN (vRAN) architecture, but was still waiting for open RAN to mature.

“At this point, what I typically say is we’re doing a lot of testing, we’re very interested in what that comes to be, but we don’t see it today at scale,” Russo said of open RAN. “It’s not to say that it won’t be at some point, but I think there’s a lot of roads in front of us on the [open RAN] space, so we’ll see how that evolves.”

Russo noted that some of the bigger open RAN challenges remain around interoperability, software, the ability to scale and performance.

“We have very high-performance standards on the Verizon network when it comes to voice, when it comes to data, when it comes to getting on the network, staying on the network and being able to do what you have to do. Generally, you know, it’s a pretty high bar if you’re going to work inside of the Verizon network,” Russo said. “It’s been a challenge to make sure that those performance levels are met. … It’s early. I’m not saying that we’re not interested in it. I certainly will see where it takes us.”

Russo’s interoperability concerns were echoed by Dish Network executive David Zufall, who explained that the ecosystem can help address this issue with more focus on setting minimum standards that vendors need to adhere to before their equipment is installed into a network. The O-RAN Alliance has been a focal point of these efforts, but real-world deployments have shown that operators might need to take more control on these efforts in the near term.

“I think that’s going to be up to [operators] to force it among our vendors,” Zufall said. “We can define the basic layers, that it’s going to be a cloud-native environment and we have our principles, so I think we can define the environment. But I think we have to take the bold step and say ‘I am going to have a multi-vendor network and I am going to have a multi-cloud network and I’m not just going to use somebody’s middleware to enable the interoperability that happens to work on both of them. We were willing to do it on the RAN and we saved some money. We’re willing to do it on hardware, but we have to go to the next step, and I think that’s on the operator community to kind of force it across our vendors.”

Open RAN needs to brace for winter

The year-long slowdown in open RAN investments is expected to continue over the next several years as the industry continues to work through maturation and interoperability challenges.

Joe Madden, lead analyst at Mobile Experts, told attendees at this year’s Cable-Tec Expo 2023 event that open RAN-related revenues peaked in 2022 at just over $2 billion; will dip slightly this year; and then drop to a $1.5 billion per year run rate between 2024 and 2026. Madden added that this trend will test open RAN-dependent vendors.

“I refer to the cycles of the telecom business as summertime and wintertime,” Madden said. “You just had the summer of 5G where we were deploying lots of base stations, everything was groovy. But now things are down. Earnings announcements are coming out and they’re on the negative side. The companies that are really betting big on open RAN, they’re going to have to survive the winter, three years of low revenue or maybe kind of the same as where they are right now, and then see growth later. I am not sure their VC investors are going to like that.”

Madden added that his firm still sees a performance gap between an optimized RAN architecture from a single vendor and a disaggregated open RAN architecture supported by several vendors. He said the initial hit was around 40%, but that has since been improved to around a 20% performance hit.

“I think the [applications] are going to continue to close that gap to where it’ll become on par at some point in time,” Madden added.

AT&T provides an open RAN boost

Coming full circle, AT&T’s late-year decision to put money and deployment numbers behind open RAN provides the market with strong momentum heading out of 2023. The carrier is fully aware of the ongoing maturity and interoperability challenges it will face, highlighted by expectations of actual deployments not happening until later in 2024 and its initial heavy reliance on a single vendor (Ericsson).

However, the decision does move AT&T to the forefront in terms of helping to drive open RAN development and positions the operator ahead of rivals in terms of taking advantage of the flexibility that can be derived from an open RAN architecture.

“The reason why open RAN is such a compelling model for RAN evolution is the fact that it gives flexibility, it gives operators the freedom to do whatever they want,” Monica Paolini, founder and president of analyst and consulting firm Senza Fili, told SDxCentral in an interview. “Whenever I talk to operators that’s what they say to me. If they can save money, that’s good, but that’s not the primary reason for moving to open RAN.”