Nokia today put more pieces in place to reframe its business model around open radio access networks (RAN) and the goal of disaggregated hardware and software. The gamble, which places Nokia ahead of its peers in supporting open RAN with a commercial offering that will be available next year, could also help the Finnish vendor regain momentum following early challenges with its 5G portfolio.

The company’s forthcoming update to its 5G AirScale Cloud RAN offering includes a virtualized distributed unit, a disaggregated 5G base station, and a fronthaul gateway that adheres to cloud-native principles. Nokia’s vRAN 2.0 configuration uses Intel’s general purpose x86 processors with hardware acceleration in Layer 1, but it’s looking forward to replacing that with GPUs for hardware acceleration in 2022, when it expects to update to vRAN 3.0.

“This is one of the smartest moves Nokia could be making in the RAN space at the moment and other incumbent vendors have or will be making similar moves,” said Chris Nicoll, principal analyst at ACG Research. “Open and virtual RAN represents the future of the carrier RAN market, but all open RAN solutions are not the same. Nokia is leveraging its extensive RAN experience and feature set with its open RAN solution, which helps separate its solution from competitors.”

While Nokia’s offering has been architected for open RAN compliance, thereby splitting the base station into a radio unit, distributed unit, radio access point, centralized unit, and O-RAN Alliance compliant interfaces, it’s still entirely composed of Nokia hardware. That could change prior to its release if other equipment and software vendors link up with Nokia to diversify the portfolio.

The Finnish vendor, perhaps as a result of this current framework, was relatively reticent to describe the offering as “open,” and opted for consistently cloudy language — a “cloud RAN solution,” for example — in its stead. 

Nonetheless, “Nokia has been proactive in the open RAN community for some time and is generally recognized among the RAN disruptors that’s open RAN capability and contribution is robust,” said Patrick Filkins, senior research analyst at IDC. “As such it is unsurprising to see it take a more aggressive stance through commercial product launches tailored for both open RAN and traditional extension of [enhanced common public radio interface] pathways.”

The company has positioned itself as “first out of the gate relative to [its] peers” Huawei, Ericsson, and Samsung, but other industry stalwarts like Cisco, which last week announced a deal with Verizon to support virtualized services on white-box hardware, are making significant progress in that journey as well, said Will Townsend, senior analyst at Moor Insights & Strategy. 

First-mover advantages might be moot considering other market dynamics at play, according to Nicoll. “It is difficult and perhaps not that important to identify the biggest supporter of open RAN among either incumbent or disruptive vendors,” he said, adding that it’s more important to track which vendors are getting their products and software into carrier networks.

“By that measure, Nokia is doing well leveraging its installed customer base — an advantage the incumbent and legacy vendors have over the disruptive players,” Nicoll added. 

Indeed, Nokia played a significant role in Rakuten Mobile’s recently launched 4G LTE network in Japan after it opened up its optical networking and radio equipment for its open RAN. The greenfield operator’s CTO Tareq Amin described it as “an extremely complex ask” for Nokia, but he framed it as a path for the vendor to make more revenue than it could by selling closed, proprietary systems.

“[Nokia] will be 10-times more profitable if they replicate just the business model [and] and the engagement strategy,” Amin told SDxCentral following the launch of its virtualized, cloud-native open RAN. Despite those early wins for Nokia, it will play a smaller role in the operator’s 5G network as it embraces gear from smaller vendors like NEC for its 5G core and mid-band radios. 

While smaller U.S.-based players, such as Altiostar, Mavenir, and Parallel Wireless have been actively promoting open RAN, “it is a mistake to perceive that open RAN is being driven solely by the disruptive players,” Nicoll said. Standards bodies and industry associations like the Telecom Infra Project, O-RAN Alliance, and Open RAN Policy Coalition, all of which Nokia is an early and active participant in, “are driving open RAN into the tier-one operators. Like it or not, the traditional vendors are an important part of the open RAN community,” he added. 

While the framework and vision for open RAN is exciting, it’s not realistic to expect incumbent operators to move to an all open RAN configuration in the near term, Filkins said. “There are still challenges associated with integration and performance,” he added.

“The disruptive open RAN vendors are generally positive about Nokia’s contributions so far, and see Nokia as a threat to their efforts as we enter the early commercial phase. It’s fair to say Nokia isn’t simply posturing for a few customers, but will enable open RAN if the broader market requests it,” Filkins said. 

Nicoll takes a similar view, adding that open RAN represents a needed tool for vendors and operators, but it isn’t the only or even most important tool. “Open RAN promises to reduce costs but may also come with reduced performance or feature support and increased integration and operations costs and complexity,” he said.

“One-hundred-percent of the top operators we surveyed indicated that having a lead vendor for their 5G and virtualized network is critical or very important," Nicoll said. "That underscores the challenge of operating, optimizing, and troubleshooting a multi-vendor open RAN solution.”