news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

【Text/Guacha.com columnist Pan Gongyu】

"Everyone here would have thought over the past few months that Huawei and ZTE had disappeared, but that's not the case. It's fair to say that the market is more competitive."

Ericsson CEO Börje Ekholm made the above remarks just after Germany's ruling coalition announced that the country's major 5G telecom operators would remove Huawei components from their core networks by the end of 2026. Perhaps a set of solid data can prove that Börje Ekholm's judgment is not a pretentious official rhetoric:

Ericsson's market share in global 5G radio access network (RAN) equipment will drop from 25.7% in 2022 to 24.3% in 2023, Nokia will rise by 1.7 percentage points to 19.5%, and the leader is Huawei - 31.3%. If the market share of cloud service providers in 5G commercial RAN is calculated separately, Huawei and ZTE will occupy two of the top three seats. As shown in the figure below:

At the same time, in a seemingly unknown corner, the Open RAN project (Open Radio Access Network), which had survived for four years, quietly announced its own demise.

Its death can be viewed from two perspectives: "physiological" and "social".

Physiologically, Open RAN has been shrinking from the entire RAN value chain, and has been declining instead of increasing over the past six years.

Sociality, that is, the free and open ecosystem advocated by the Open RAN system has never achieved its so-called goal.

Data shows that the market share concentration of the top five wireless equipment suppliers in the world is getting higher and higher, indicating that Open RAN is actually going in the opposite direction and is becoming more and more closed. In addition, the capital expenditure of Open RAN by several leading operators in the world has been declining year by year. If even the operators who like to promote Open RAN the most have become uninterested in Open RAN, then it is not an exaggeration to issue a death certificate for Open RAN today.

What is Open RAN? A beautiful vision in the past

When talking about the original intention of the looming Open RAN organization, we must go back to the ancient 2G/3G era.

In the pre-4G era, the wireless access network consisted of two network elements: base stations and controllers that managed base stations. In the 4G and 5G eras, controllers disappeared and base stations could be directly connected to the core network.

As a separate network element, the base station "hides" almost all the interests of operators and network equipment manufacturers.

The base station in the 2G/3G era is a complete black box, which contains hardware such as power supply, baseband, transceiver, radio frequency, and supporting software to run these hardware. As for how these hardware and software are integrated, and what modules the hardware consists of, large operators don’t have to worry about it when purchasing, and there is no need to know whether there is a rabbit or a fox in the black box. Just buy it in a package. If there is a problem, the sales and engineers of Huawei and ZTE will be responsible. Everyone gets what they need and stays safe.

However, in the 4G/5G era, with the demand for high data transmission rate, large capacity and low latency, a Pandora's box has been opened. The black box of this base station is divided into BBU (baseband processing unit) and RRU (remote radio unit), connected by CPRI (common public radio interface). It can be seen that this black box base station is divided into at least three parts, BBU, RRU and related interfaces - its equipment integration is lower than that of the 3G era.

The world of communication equipment vendors is somewhat similar to the ecosystem of semiconductor equipment and EDA manufacturers. With the gradual transparency of the evolution of technology routes, the surge in capital expenditures and the rejection of fragmented supply by downstream customers, this circle has become smaller and smaller, until it is concentrated in four or five leading companies, forming a quasi-monopoly situation of joint efforts, which objectively reduces the bargaining power of operators. They have suffered from the "three threes theory" for a long time! (The high cost of 5G RAN - three times the number of base stations of 4G, three times the energy consumption of base stations of 4G, and three times the price of base stations of 4G).

The difference between traditional RAN solutions and Open RAN

After all, although equipment manufacturers are very competitive internally, they are very happy to provide integrated package solutions to operators.

In the process of communication technology migration from 3G to 4G and 5G, many operators feel that the gears of fate seem to be turning in their favor. They are thinking, can they purchase BBU, RRU and related software separately?

This can break the "black box" architecture of traditional telecommunications equipment with integrated hardware and software and highly integrated interfaces, allowing operators to use software and general hardware from different suppliers to achieve modular hybrid networking, which can not only reduce dependence on a single supplier, but also improve bargaining power and reduce procurement costs.

Therefore, in 2018, operators such as AT&T in the United States took the lead in establishing the O-RAN Alliance. At that time, ZTE, China Mobile, Lenovo and others were all active participants in the O-RAN Alliance.

Objectively speaking, the establishment of the O-RAN Alliance is in line with the ICT industry's general trend of "software-defined X". In the 5G era, the traditional BBU is further split into radio units (RU), distributed units (DU) and centralized units (CU), giving operators more choices and further increasing network flexibility.

ZTE, Nokia and other global leading equipment manufacturers also joined the alliance because they saw the opportunity to win large orders from small and medium-sized operators. They could also use the open interface convenience brought by software upgrades to share their resources and optimize their own software and hardware collaboration solutions.

However, all these beautiful visions suddenly encountered a turbulent geopolitical impact. As Huawei and ZTE's market share in the global wireless access network continued to increase, it stimulated the anxiety of US regulators. After 2019, ZTE and Huawei were successively hit hard by relevant US "technological-political" review departments. The latter even suffered a rare "one country vs. one company" comprehensive supply chain cutoff in 2020 in the history of global business.

On May 5, 2020, with the support of the Pentagon, the Open RAN Policy Alliance, composed of 31 global technology companies, was officially established. The Pentagon completely tore off its disguise in the official announcement, using the so-called "open 5G" concept to exclude Huawei and ZTE from the "software-defined RAN" technology community. Open RAN has been painted with a strong geopolitical color. The United States, with the so-called "national security" as the driving force, hopes to build a controllable supply chain and ecological chain. Let's compare the list of members of the O-RAN and Open RAN alliances. In the latter circle, there are no Chinese operators and equipment manufacturers.

Comparing the lists of the two alliances, the latter no longer has any Chinese companies.

If the conclusion that Open RAN is the embodiment of the U.S. "walled courtyard" based solely on the absence of Chinese manufacturers in the first list of signatories is not convincing enough, the following fact proves that Open RAN is a tool used by the U.S. Department of Defense and the Department of Commerce to exclude Huawei and ZTE.

In August 2021, Nokia suddenly announced the suspension of its activities in the Open RAN Alliance, citing the company's legal team's judgment that the risk of penalties from the United States was too high to continue working within the industry alliance. Nokia has realized that many Chinese companies among its upstream and downstream partners, such as Shanghai Jinzhuo Technology and supercomputing company Phytium, have been included in the "Entity List" drawn up by the United States. Although these Chinese companies may not be members of the Open RAN Alliance, they have commercial partnerships with other members of the alliance, and the "Entity List" stick may be wielded at any time. Nokia announced its temporary withdrawal from the Open RAN Alliance, on the one hand to protect itself, and on the other hand to "put on eye drops" for other competitors such as Ericsson.

If O-RAN still has an 80% business flavor, then Open RAN has less than 1% flavor, and its orientation is to unite with the party and eliminate the dissidents.

The establishment of Open RAN means death

The Open RAN Alliance has been in a long-term slump for four years and is now like a zombie, which is actually beyond the expectations of most people in the industry.

So, why did Open RAN fail to achieve the ideal goal of O-RAN, which was to open and decouple the radio unit (RU), distributed unit (DU) and centralized unit (CU) and their software, white-box the base stations, lower the threshold for entrants, and achieve mutual benefit for operators and equipment manufacturers?

As early as the second half of 2020, Ericsson, which joined the Open RAN Alliance reluctantly, published a number of technical articles and white papers to explain the immaturity and potential risks of Open RAN technology. For example, one of the main problems is that in the traditional RAN deployment method, the DU and RU come from the same manufacturer, and the fronthaul interface between the DU and RU is implemented by a single manufacturer. O-RAN uses the 7-2x open fronthaul interface, and O-DU and O-RU can come from different manufacturers, which means that O-DU cannot fully control O-RU, and the decoupling of software and hardware increases the threat to the trust chain, and open source code increases the exposure of vulnerabilities and other security risks.

Let's put Ericsson's concerns more clearly: Open RAN is not mature in terms of technology itself, and neither operators nor equipment vendors can control it. Both sides have been in a state of "incompetence" for a long time, so they cannot use market-driven means to accelerate their operation. In the end, they can only nail the lid of their own coffin in a state of incompetence and powerlessness.

First, the incompetence of operators participating in Open-RAN.

Under the Open RAN technology architecture, operators have to play different roles. They are both product managers of Open RAN and integrators to integrate different solutions and IPs from different suppliers.

In other words, they are not only the chefs responsible for cooking, but also responsible for going to the market to purchase. In theory, Open RAN opens all the stalls in the store, allowing shoppers to freely choose the most cost-effective ingredients. The question is, if there is a problem with the food, who is responsible? Can it be traced back to the quality of the raw materials in a certain stall? Or is there no problem with the ingredients, but the chef's cooking skills are not up to standard? It is difficult to find someone to blame. As mentioned earlier, under the traditional RAN architecture, a certain equipment vendor is responsible for packaging all the software and hardware integration solutions. The solution provider and the scapegoat are the same, so this problem will not occur.

Limited closure, clear rights and responsibilities; free and open, blame each other. Over the years, this situation has often occurred in various tracks of the ICT industry, and the reasons behind it are thought-provoking.

Secondly, the incompetence of equipment vendors involved in Open RAN.

The Open RAN architecture clearly specifies that the interfaces between RU, DU, and CU units allow operators to combine and match units from different suppliers. The interfaces are open and are euphemistically called universal interfaces. But from the beginning, the hardware and software running on each unit are still unique to the equipment supplier. ASIC, or dedicated custom chips, can provide the best price-performance ratio and have been the first choice of large equipment suppliers so far, but ASIC requires a lot of money and expertise in the early stage.

In the process of building the RU, DU, and CU network element modules, Nokia once again acted as a clown who tried the first step. In order to seize the market in advance, Nokia adopted the FPGA (field programmable gate array) solution for DU and RU. Compared with ASIC, FPGA is highly flexible and versatile due to its field programmability, and is particularly suitable for application scenarios with fast algorithm iterations. However, the total capital investment in FPGA is actually much higher than that in ASIC. Although Nokia can go to market ahead of schedule through later reprogramming and seize the track for a while, the later iteration and maintenance make them miserable. After 2021, they have to abandon FPGA and switch to ASIC solution again.

In the field of base station equipment, there is often a situation where one step is missed and then falls behind. Nokia's mistakes have allowed Huawei and ZTE to continue to increase their market share and customer numbers despite US sanctions. Nokia's withdrawal from Open RAN was also partly due to the fact that it saw that the alliance members were all harboring ulterior motives and the prospects were bleak.

Conclusion: Open RAN still cannot do without Huawei

Huawei and ZTE watched coldly and turned their backs on the situation, while Open RAN collapsed.

Foreign media also pointed out that another big winner is Samsung Electronics. The main reason is that although Samsung Electronics joined the alliance, it had been plotting to monopolize the hardware and software integration solutions of a certain operator from the beginning. The first thing Lee Jae-yong, who was still the "crown prince" at the time, did after being released from prison was to fly directly to the United States and win a large order for Verizon 5G RAN base stations. Samsung went against the trend and became the biggest winner in the alliance, which just shows that the underlying logic of Open RAN is not feasible.

Even if we go forward forcefully, Open RAN still cannot separate Huawei.

The network element and its management software are a whole, connected to the mother body through a proprietary interface, an "umbilical cord". It is not impossible for another participant to update and control Huawei's RAN, but Huawei must open its interface interconnection technology to that party. Although the cost of managing Open RAN software accounts for only 1% of the total capital expenditure of the 5G network and almost no operating cost, as Huawei controls the interface interconnection IP, as long as Huawei does not authorize its IP protocol, then the alternative will continue to be blocked and will have to redesign a set of RU, DU and CU interconnection solutions.

The main force behind Open RAN, the Pentagon, may not yet understand that the principle of "self-interest survives, altruism lasts long" must be upheld in the field of 5G wireless access networks. Open RAN is not the first, and certainly will not be the last, to adopt the name of openness but practice closedness.

This article is an exclusive article of Guancha.com. The content of the article is purely the author's personal opinion and does not represent the platform's opinion. It cannot be reproduced without authorization, otherwise legal liability will be pursued. Follow Guancha.com WeChat guanchacn to read interesting articles every day.