Two pieces of recent news highlight what is going to be an interesting year for the radio access network (RAN) market. And by interesting I mean a market that is likely to be turned head over heels.

First, word has been slowly spreading out of Japan that Rakuten Mobile’s open RAN (O-RAN) network deployment plans have not been as smooth as hoped. Despite the Japanese operator’s aggressive deployment and a relatively unloaded network, its “network performance has nevertheless deteriorated,” analysts at MoffettNathanson wrote in a report. Subscriber growth has been “disappointing” and losses are accumulating, the analysts added.

While much of the operational “disappointment” is likely due to the ultra-competitive nature of the mature Japanese telecom market – something that led Rakuten Mobile to adjust its pricing model – the network performance issue is more troubling.

As has been extensively covered, Rakuten Mobile has taken an unorthodox open approach to constructing its network. It’s relying extensively on new software that breaks apart traditional propriety models for deploying a mobile network.

This approach has been closely watched by both legacy vendors and operators for different reasons. Those legacy vendors are monitoring to see how much this strategy will impact their decades-old operating and financial model. The legacy operators are looking for any insight into ways they might be able to break free from those past models.

So far it appears that Rakuten Mobile and its vendor ecosystem have experienced enough growing pains to at least forestall the “open” overhaul of the telecom equipment space. But, there still remains too much cost-saving potential of an open model to keep those efforts a bay for long.

Open RAN pledge

This leads to the other chunk of news, which was the ongoing push by established telecom operators to support open RAN efforts.

The broadest move was one made by Europe’s four largest telecom giants which signed an agreement to individually and jointly commit to deploy O-RAN technology. That group includes Deutsche Telekom, Orange, Telefónica, and Vodafone.

Those operators said they will work with the O-RAN Alliance, the Telecom Infra Project (TIP), and European and country-specific policymakers to help open RAN reach “competitive parity with traditional RAN solutions.”

These efforts are a bit different from what Rakuten Mobile is actively doing in Japan in that the European operators are dealing with brownfield networks that are laced with legacy and proprietary equipment. This challenge has slowed the deployment of new open systems due to integration challenges.

In fact, analysts are predicting that brownfield deployments are likely to be rare for the next couple of years.

“Commercial buildout in greenfield, rural, and enterprise markets is likely in the near term (one to three years), but there are bigger challenges when it comes to deploying in a 5G macro network that is capable of supporting very-high traffic loads and ultra-low latency in a wide range of spectrum bands, including millimeter-wave (mmWave),” Analysys Mason noted in a recent report. “Non-greenfield deployments of macro Open RAN will therefore be rare before 2023, and operators will need to feel confident that any losses are fully outweighed by gains. The perception of these gains is likely to change as operators evaluate the new platforms in detail.” The research firm concluded that 70% of operators it recently surveyed expect opex “to be the same or higher in the first three years of open RAN.”

These developments indicate that while the RAN market is indeed set for an overhaul, it might be a slow turn, which I am guessing the established vendors will appreciate and the new entrants will continually be fighting to overcome.

Hyperscalers watching

However, that fight might all be for nothing if, as some are predicting, the real winner in all of this turns out to be the cloud hyperscalers that are slowly spreading their influence across all connection mediums.

John Baker, who is SVP of business development at Mavenir, recently told SDxCentral that he expects hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud will become the real telecom power players.

“I really do believe the hyperscalers are going to become the new telecom providers going forward,” Baker said. “Apart from the physical radio that goes on a tower, everything we’re doing now follows the data center model, and these guys know how to manage data centers, software, and applications. If you look at open RAN essentially as being a collection of applications that run on a server, then it really is falling into their camp.”

Baker’s insight is no doubt influenced by his work at O-RAN proponent Mavenir, but it also highlights what has been a growing push by the broader cloud ecosystem into the telecom space.

Matt Walker, chief analyst at MTN Consulting, wrote in a recent report that those cloud providers are increasingly helping mobile network operators with “service and application development, shifting of workloads, and development and marketing of cloud services.”

“While many observers, including more than a few telco executives, look at the webscale sector with trepidation, the smart ones are now pursuing collaboration,” Walker explained. “We expect this activity to accelerate in 2021 as telcos search for cost savings.”

With the virtualization and cloudification of telecom networks still in its infancy, the ability for a new vendor model that can help speed up 5G deployments and lower potential costs is a no brainer. That has set the table for what should be a dynamic year across the RAN ecosystem.