Connectivity O-RAN: Four Developments Bring Fresh Impetus to Telecommunications

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In the telecommunications industry, there has been little movement in recent decades, and a few providers have established themselves as market leaders. This could change with O-RAN.

Chris Kramar is Director & General Manager OEM Solutions DACH at Dell Technologies.

A radio access network (RAN) consists of similar components at its core as edge applications: there is an OT system, in this case, radio towers with their various components, a specialized IT system, and of course management and operational software at multiple levels. These RAN applications are typically self-contained systems, the so-called black boxes, and completely proprietary.

The O-RAN initiative—which stands for Open Radio Access Network—aims to break open these closed structures. An important step in this process includes converting the specialized IT systems to industry standard servers with x86 technology. Open standards for the underlying hardware and software, as well as open interfaces, are also currently being explored and tested. The associated hopes for the market are high. At Dell, we highlight the four greatest expectations connected with this initiative.

1. The Market is Opening Up

In Germany and across Europe, the vast majority of radio access networks are provided by just three suppliers. The already scarcely diversified market situation is likely to culminate in a duopoly in the foreseeable future due to geopolitical events—Huawei is expected to gradually disappear from the market.

If an RAN provider drops out, there is great hope to fill this gap with new competitors. This is exactly where the open architecture of O-RAN comes in, because when all layers and their components that enable modern telecommunications become interchangeable, the market opens up, creating real competition.

2. An Innovation Boost is Manifesting

With the competition that O-RAN enables, there is also the hope of significantly more innovative output. When a market is dominated by two or three major providers, these companies set the pace.

Since O-RAN has not yet been able to establish itself comprehensively, this hope remains unfulfilled for now. While the major providers are gradually opening up—new facilities are fundamentally being built to be O-RAN-ready, so to speak—a true innovation boost for the industry will only be truly possible through open standards and interfaces.

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3. Costs are Decreasing

It is well known that competition stimulates business—and it generally also brings movement in pricing. A significant expectation for O-RAN is therefore that competition will make conditions more favorable for customers at the same performance level. As long as only a few companies hold the majority of market shares and the market remains closed without O-RAN, prices are likely to rise rather than fall permanently.

4. Collaboration Between Manufacturers and Service Providers is Being Established

There remains hope that telecommunications and IT providers will also collaborate more closely with each other—something that has not been widely observed so far. This is also a reason why the progress towards O-RAN is slow. While politics and the economy are working towards its introduction, the practical technological implementation is still challenging, besides economic considerations. This is partly because the necessary IT infrastructure is still in its early stages, even though manufacturers have now developed validated holistic systems of hardware and software through a large network, and their partners can provide the necessary solutions for the higher levels.

The time is ripe for the opening of the Radio Access Network. Until the technology can be fully applied, Cloud-RAN or vRAN are the pragmatic interim steps. The industry and all other proponents of an open approach agree on this issue. Although we could already be significantly further along in its dissemination today, the course has nevertheless been set. The market will become more open, the willingness to innovate will increase, and costs will decrease. Now it's about staying on track and driving the positive development forward.

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