Steve Papa co-founded Parallel Wireless in late 2012 because he viewed Ericsson, Huawei, and Nokia as “vertically integrated hardware companies about to be disrupted by Moore’s Law,” he told SDxCentral.

It’s a long play for the serial entrepreneur who now has the ear of the White House and federal agencies that are pulling out all the stops to blunt the rise of Chinese vendors and elevate companies based in the United States in their stead.

While that level of interest is a rare and incredible opportunity for any business, Papa doesn’t appear to be letting it get to his head. He’s rather candid about the challenges of open radio access network (RAN) technology, also called ORAN, and is using his position to dispel some of the hype while advocating for increased investment and innovation in areas that he views as inadequate.

Open RAN is, at its core, an interface like any other that promotes interoperability across a wide swath of vendors and protocols, he said, but “ORAN is only as good as the radios that are available.” Referencing the U.S. government’s efforts to invest $1 billion in 5G research, the CEO of Parallel Wireless said he’s trying to educate policymakers about the disadvantages that open RAN vendors have on 5G.

“The place you need to put the money in is the semiconductor innovation and signal processing so we can disrupt Huawei there,” he said. “Putting it into virtualization isn’t going to change that problem,” particularly when radios comprise the majority of costs for network operators, Papa explained.

“What’s happening with ORAN is we’re putting all the complexity up in the radio now” with gear like massive multiple-input multiple-output (MIMO) antennas that dramatically increase the capacity of each site, he said. “So we can say we’re making everything [on] commodity servers, but it’s a bit sleight of hand because we pushed a boatload of capacity complexity up that tower” for 5G.

Virtualization ‘All for Naught’ Without Better Radios

“Everyone wants to forget the radios, and the radios are what makes wireless wireless. ORAN is great, but tell me how we’re going to have the world’s best ORAN radios. That’s what I want to hear people talking about,” Papa said. “There’s too much attention to things like virtualization right now. I could have the best virtualized software in the world, but if I don’t have access to the best radios it’s all for naught.”

Efforts to create specs for radios built on white-box hardware are not meeting that need either, he said. “My concern is that if people don’t talk about that, we won’t direct the investment dollars there. That’s what the industry needs to be championing: more innovation in communication semiconductors.”

Virtualization is interesting, but largely insofar as it opens up innovation, Papa explained. “When you have such a consolidated, vertically integrated business, the innovators that only do one piece don’t get to do their piece,” he said.

“You have to go to the high priests, Ericsson and Nokia, and the high priests always have folks who say ‘well, we can do this better,’” he said. “They get so arrogant with that for so long that they get their clock cleaned by someone like Huawei because they aren’t paying attention.”

Huawei has developed the “most efficient radios” because it’s been investing in gallium nitride much more so than Ericsson, Nokia, and smaller semiconductor vendors, Papa said. Energy efficiency is of paramount importance, particularly in a 5G deployment because it impacts everything from heat dissipation to reinforcements that might be required to carry new radios and bigger batteries on poles, or house generators and fuel tanks at the base.

“Vodafone already spends over $600 million a year on their electrical bill. With a full 5G rollout, I’d predict that’s $2 billion to $3 billion,” he said.

Open RAN Won’t Reach 5G at Scale Anytime Soon

Open RAN will eventually become a dominant technology in 5G networks with all operators moving the majority of their network infrastructure to open RAN, but that’s still years away, according to Papa. Operators with tighter margins and networks riding on older technologies are showing the greatest near-term interest in open RAN, he said.

Operators in Africa, for example, spend as much on equipment today as AT&T does but generate 5% the revenue per customer, if not less, he explained. Operators with more challenging economics care even more about open RAN currently because of that additional exposure to risk.

“If you’re Vodafone and you have exposure to some of the more challenged markets, you need disruption or else your business model is invalid in those markets,” Papa said.

Parallel Wireless separates itself from other open RAN vendors by supporting 2G and 3G “because that’s where most of the action is going to be early on,” he said. “It’s a bigger undertaking to add 2G and 3G, but we think that’s really important and we’ve done a lot, we’ve invested a lot there.”

While there are remarkable greenfield network deployments underway riding exclusively on open RAN, such as Rakuten Mobile in Japan, there will be relatively few examples like that during the next five years, he added. “The only way you’re going see an open RAN deployment at scale in 4G or 5G in the near terms is a greenfield.”

Parallel Wireless has activity on six continents, and Papa said he expects the majority of interest in open RAN to remain with 2G and 3G operators, or operators expanding 4G into more markets. “Now, that doesn’t mean you’re not going to see some [open RAN activity from] AT&T and Verizon, but they’re mostly going to be interested in it as a way to hold a gun to the head of Ericsson, Nokia, and Samsung,” he said.

A stable supply chain is, at least for now, of paramount concern for those operators, according to Papa. “In the near term, it’s more about negotiation but they are serious. They will do an extended de-risking period and they will rely on other operators doing stuff as part of that de-risking.”

Meanwhile, like everyone else, Papa is weaving through new complexities presented by the COVID-19 pandemic, but he remains relatively positive about its impact on the supply chain and sales cycles for open RAN. “Obviously there are logistical realities. In the immediate term, you can’t move people around,” he said.

Semiconductor and printed circuit board manufacturing, which already occurs in highly protected environments, will continue “unless something big happens that none of us are anticipating,” he said. Some rollouts have slowed since the coronavirus outbreak reached global proportions, but his biggest concern for the open RAN landscape is a tightening of capital that will be required to invest further in the technology.