The ambitious plan to make Huawei equipment obsolete
As Oliver Dowden finally confirmed that Britain’s mobile networks would be forced to rip Huawei out of their 5G networks, the Culture Secretary dangled a carrot to go along with his stick.
On Tuesday, Dowden hinted that the Treasury would fund investment in an alternative to Huawei, whose hardware has been deemed too risky after US sanctions against the Chinese group.
This alternative is not a full-blown competitor. There is no plan for a homegrown Huawei. Instead, it is an idea: a software initiative called OpenRAN that could not only bypass Huawei, but upend how mobile phone networks are built, making them cheaper, faster and more transparent.
“In order to facilitate the OpenRAN solution, that will require investment from the Government”, Dowden said, when asked by Conservative MP Flick Drummond how the Government would support an industry that now faces a £2bn bill for removing Huawei from their 5G networks. He added that this would come at “a future fiscal event”.
“The future… is an OpenRAN network”, Dowden also said.
What is OpenRAN?
The easiest way to explain OpenRAN is perhaps by explaining what it is not.
Decades of industry consolidation mean that only a handful of companies capable of providing the equipment needed to build a radio access network, the infrastructure such as base stations and antennas, and the software that controls them, that exists between a mobile phone and a network’s fixed core.
Huawei, Ericsson and Nokia control three quarters of this market for 5G. Critics say that means higher prices, less choice and slower innovation. It is part of the reason weaning Britain off Huawei is so difficult.
Huawei and the West – a timeline
OpenRAN, by contrast, promises to break this market open. The initiative involves developing open-source network software that can be used by anyone and work across different equipment. This would allow new entrants into the hardware market, and let the telecoms companies building mobile networks to mix and match equipment.
Proponents see a parallel with the open-source software revolution that has changed computer servers and databases, giving the companies that use them much more control and disrupting the grip of tech companies such as IBM and Microsoft.
The idea has some big backers. BT, Vodafone, and Telefonica, which run Britain’s three biggest mobile networks, as well as Facebook, Intel and a string of overseas telecoms companies, are members of the Telecom Infra Project, a key industry body backing the technology.
Vodafone started testing OpenRAN in the UK last year, and O2 has said it is conducting trials in London this year. For cash-strapped telcos now dealing with the prospect of an expensive overhaul, any opportunity to save money will be welcomed.
There is one big problem. The technology is not ready yet for 5G networks, and it is unclear when it will be. Vodafone’s OpenRAN test is for the previous generation 4G networks, and the Telecom Infra Project does not expect to have a standard until next year at the earliest. Today, only one company – Japan’s Rakuten – is building a 5G network built on OpenRAN. With Apple set to introduce its first 5G iPhone later this year, networks might not be able to wait.
William Barr, the US Attorney General, one of America’s most senior Huawei hawks, and a former executive at US telecoms group Verizon, has been even less optimistic about its prospects.
“The problem is that this is just pie in the sky,” Barr said of OpenRAN at a speech in February. “This approach is completely untested, and would take many years to get off the ground, and would not be ready for prime time for a decade, if ever.” He suggested the US should instead invest in Ericsson or Nokia to counter Huawei.
US Attorney General Bill Barr – Sipa
Geoff Blaber, an analyst at CCS Insight, says: “It’s certainly no silver bullet to the challenges around Huawei. We’re not at the point where OpenRAN can come in and replace proprietary hardware, it’s simply not mature enough.”
Michael Davies, who leads the New Technology Ventures programme at London Business School and is an adviser to telecoms companies, says that even if networks wanted to embrace OpenRAN, the hardware to support it, complete with cutting edge microchips and support for multiple radio frequencies, is hard to develop.
A handful of start-ups are trying, but operators must invest in equipment that will sit in their networks for years, making them naturally conservative, and unlikely to bet on a risky upstart.
Equipment sellers companies are also notorious for protecting their intellectual property, and so building OpenRAN technology, which threatens the Huawei-Ericsson-Nokia oligopoly, could well be met with patent lawsuits. “You can’t build a 5G radio without infringing on a whole bunch of Nokia and Ericsson patents, so you’re gonna have to pay them something,” says Davies.
Industry projections are that OpenRAN might be commercially viable in the middle of the decade, towards the end of the timeline for ripping Huawei out of the UK’s 5G networks. In the meantime, operators are likely to turn to Nokia and Ericsson.
But in the long run, the technology means building networks will become cheaper and more flexible. Earlier this year, Nokia took a step to conceding this, committing to making its equipment compatible with open software.
“It is absolutely going to happen,” says Davies. “It is on the cusp of being ready, but it is not quite completely there.”
