Open virtualized radio access network (vRAN) technology provider Altiostar closed a $114 million Series C funding round that included participation from Rakuten, Qualcomm Ventures, and Tech Mahindra. The company says it will use the funding to expand its vRAN product for operator’s 4G LTE and 5G end-to-end webscale cloud native networks.

The vRAN vendor was founded by former Starent Networks founder and CEO Ashraf Dahod in 2011. Dahod served as the CEO of Starent through its 2007 IPO and subsequent $2.9 billion acquisition by Cisco in 2009. Cisco was an initial investor and backer in Altiostar. According to Crunchbase, the company has raised more than $211 million to date.

Altiostar’s core offering is its 5G-ready vRAN software that supports open interfaces and disaggregates hardware and software to help with the buildout of open, multi-vendor webscale networks.

In a prepared statement, Dahod said that the new funding highlights the “immense 5G opportunity we have in front of us.”

According to Rajesh Ghai, research director for IDC’s network infrastructure research program, vRAN is an architecture that is conducive to 5G and will serve as an advantage, but isn’t seen as an absolute necessity.

“When 5G reaches maturity you are going to be looking at multiple use cases on the same infrastructure, that’s kind of the promise of 5G,” said Ghai. “It’s not just about speeds, it’s also about more connections and also about low latency so if you want to enable those use cases beyond this speed of data you need to do a construct called network slicing, and that network slicing requires a network which is end-to-end virtualized.”

And while network slicing doesn’t always require this virtualization, it does serve some advantages. “From the flexibility perspective, the virtual RAN is a lot better. It has got the cloud architecture that you know a lot of these telcos want to move toward,” Ghai said. “So it is kind of something that is desirable for an operator who wants kind of to have the flexibility and agility of the cloud.”

IDC recently reported in its Worldwide 5G Network Infrastructure Forecast that a large portion of 5G investments will be spent on the RAN and estimates that the RAN will grow at a 156.6% compound annual growth rate (CAGR) from 2018 to 2022.

Ghai noted that the RAN market has long-established players — such as Ericsson, Nokia, Huawei, and ZTE — and upstarts, which includes Altiostar and to an extent Mavenir. “These [upstart] companies have obviously come to the market to disrupt the existing players,” he said.

While the established vendors have indicated they want to move toward virtualized RAN, there hasn’t been a lot of action. "Altiostar has beaten them to that in terms of the first global virtualized RAN with Rakuten," Rhai said. "Rakuten has kind of been the poster child for virtualized RAN deployment."

Rakuten has an ambitious plan for a fully virtualized mobile network in Japan. It plans to spend about $6 billion on this new network to compete against incumbents NTT DoCoMo, KDDI, and SoftBank. Aside from Altiostar, it intends to use equipment from Cisco, Nokia, Intel, Red Hat, OKI, Fujitsu, Ciena, NEC, Qualcomm, Mavenir, Quanta Cloud Technology, Tech Mahindra, Viavi, Allot, Innoeye, and Sercomm.

The service will initially be through a 4G LTE mobile virtual network operator (MVNO) agreement with NTT DoCoMo, before evolving to a fully virtualized 5G network beginning in early 2020.

According to Ghai, the market is watching this deployment to see how it turns out before other operator moves to a virtualized RAN. “I think I would say the efficiency and the flexibility argument will win eventually and then at that point in time you should see a lot more virtualized RAN deployments in the market," he said.

Apart from Rakuten, Altiostar also has significant partnerships with investors Qualcomm and Tech Mahindra. With Qualcomm the vendor is collaborating to combine its vRAN and Qualcomm’s radio technology and small cell platforms. And it has signed a value-added reseller/system integrator contract with Tech Mahindra.