The Incumbents are Coming for Open RAN – But There’s Still Hope (Off-Grid)

May 17, 2021

Late in 2020, Vanu’s CEO Andrew Beard contributed a piece to RCRWireless titled “Is Open RAN Disruptive? Not for Everyone.” It argued that the hundreds of billions of dollars invested in Open RAN technologies would, in the long run, be a win-win for MNOs and incumbent product vendors serving urban and suburban markets. However, as a sustaining innovation, the integration of Open RAN compliant components into network equipment provider products will ultimately allow incumbent vendors to integrate third party commodity components and retain control over critical portions of the system where the best performance delivers improved revenue and margin opportunities for MNOs – ending any ideas of a complete market disruption arising from new entrants who were the early adopters of Open RAN.

We are not far into 2021 and already there are significant signs that the Open RAN start-ups of the past two years are about to face competition the likes of which they’ve never seen. Ericsson’s newly announced Open Lab is set to drive innovation and collaboration around 5G RAN technologies – with a focus on Ericsson’s Cloud RAN products. Almost contemporaneously, a group of MNOs issued a statement indicating that, while they are looking forward to adopting Open RAN, the technology must meet all of the performance metrics applicable to integrated RAN solutions.

These are the clearest indicators yet that market forces will push incumbent network equipment providers and MNOs in the direction of Open RAN, but that the performance and market requirements will prevent widespread adoption of solutions from new entrants. Specifically, when adherence to an open interface prevents cross layer optimizations that improve performance, the allure of superior economic performance associated with integrated solutions offered by incumbent vendors will ultimately limit the appeal of Open RAN-compliant solutions for urban and suburban markets.

Vanu has been a pioneer in the development of disaggregated solutions based on open standards since its founding. We believe that Open RAN still holds promise for real disruption – where new entrants continue to garner significant revenue opportunities – in off-grid markets. These regions are typically underserved by MNOs and incumbents because existing solutions cost more to own and operate than the revenue potential of the market will justify. The unique requirements of off-grid markets are easier to address with Open RAN’s sweet spot – quick-to-market, low-cost solutions composed of components that are low-power, simple to deploy and use and easy to maintain.

Open networks are at the heart of Vanu’s off-grid solution because the modularity of Open RAN products and other site components enables us to incorporate different technologies that are best suited to meeting the unique and varied needs of off-grid markets. In short, for off-grid markets, as opposed to the urban and suburban segments, the “Open-ness” of OpenRAN can and should be a critical element in the success of the product, not a challenge that needs to be overcome to meet customer requirements.


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