Highlighting the fragile nature of the current open radio access network (RAN) market, open RAN vendor Airspan Networks is working through a Chapter 11 bankruptcy reorganization process.

The Florida-based vendor filed for Chapter 11 bankruptcy protection as part of plan that will see Airspan become a private company and gain access to up to $95 million in new equity financing. That funding package is being led by Fortress Investment Group.

Fortress is providing access to more than $53 million in immediate financing, which with Airspan’s cash on hand is expected to provide the vendor with “sufficient capital during the restructuring process to support Airspan’s operations.” This includes “paying employee wages and providing benefits to employees, and to pay vendors and suppliers in full in the ordinary course of business.”

“This support agreement is the culmination of a strategic review process, and we believe it is the best path forward for Airspan to continue providing exceptional services and products to our customers worldwide,” Airspan CEO Glenn Laxdal explained in a statement. “By strengthening the company financially with new capital and a debt-free balance sheet, we will be better positioned to execute our plan to capitalize on the significant growth opportunities across our public and private network markets.”

Airspan’s current shareholders will have access to a pool of $450,000 in exchange for their current shares.

The Chapter 11 filing comes after a hectic financial year for the vendor.

Airspan in early 2023 signed a deal to sell its Mimosa Networks subsidiary to Radisys for $60 million. Airspan had originally acquired privately held Mimosa in late 2018.

Airspan shortly after entered into a new $25 million financing agreement with Fortress, and reconfigured the terms on $52.5 million in outstanding senior secured convertible notes at an increased interest rate of 10%. Airspan at that time also upended its leadership by removing the CEO title from Chairman Eric Stonestrom and giving it to its COO and former Ericsson executive Glenn Laxdal.

The moves had little impact on improving Airspan’s bottom line. The vendor’s last quarterly earnings release, which was for the third quarter of 2023, showed a 65% year-over-year drop in revenues to $14.3 million. However, the Mimosa sale allowed Airspan to post a $9.9 million profit for that quarter.

Despite the financial struggles, Airspan continues to participate actively in the open RAN, 5G and fixed-wireless (fixed-wireless access (FWA)) space.

The vendor has been working through delays in providing in-flight broadband operator GoGo Business Aviation with 5G equipment. It’s also continuing to provide equipment to private network operator NextWave.

Airspan is also part of the recently established Acceleration of Compatibility and Commercialization for Open RAN Deployments (ACCoRD) project being funded by the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and its Public Wireless Supply Chain Innovation Fund and headed by leading operators like AT&T and Verizon.

Airspan’s financial turmoil also highlight ongoing challenges in the open RAN space. Analysts have reigned in expectations for the market, noting current investment cycles will push out open RAN momentum until at least 2025.

Joe Madden, lead analyst at Mobile Experts, noted at an industry event last year that open RAN-related revenues peaked in 2022 at just over $2 billion, dipped slightly in 2023, and are expected to hit a $1.5 billion per year run rate between 2024 and 2026.

ABI Research earlier this year reported that while second-tier telecom vendors like Samsung, Mavenir, NEC, Fujitsu, Rakuten Symphony and Parallel Wireless continue to dominate the open RAN space, that market overall will account for less than 8% of the total RAN market by the end of this year.

Iyad Tarazi, president and CEO of private 5G network platform provider Federated Wireless, last year told SDxCentral that the open RAN market and broader ecosystem had indeed hit a financial inflection point.

“It’s to be seen. I’m sure that it is to be determined,” Tarazi said of the vitality of the overall open RAN ecosystem. “The defining moments of the last 12 months – and I can tell you because I am working it myself – is everybody has to transition from innovation companies thriving on easy money with low interest rates into companies that have solid, repeatable and profitable business models.”

Tarazi said that a sound business model will be essential for these open RAN firms to navigate the near-term turbulence.

“I view the business model innovation as important as the technology innovation,” Tarazi said. “Those companies that are smart enough and have the right support and help with the right, smart people and helpers that can help them innovate their business model as well as the technology, they will thrive in the future.”

Tarazi added that those that don’t have this level of support or have the right business model will suffer.

“We are going to see a rearrangement across the board, whether we like it or not. These rearrangements are healthy,” Tarazi said. “I think the [open RAN] ecosystem will continue to thrive and grow. The players themselves, it’s an individual evolution piece. Every player either will have to find the right niche, the right plan, the right business model, the right alignment, the right arrangement. And my advice to everyone is the sooner you think of the business model, the sooner you’ll thrive. Technology’s not enough.”