Five of Europe’s largest mobile operators have warned the continent risks ceding leadership in the development or OpenRAN technology unless policymakers take urgent action to bridge the gap with other parts of the world.
The Radio Access Network (RAN) market has traditionally been dominated by a few major players who offer highly integrated cell sites comprising radio, hardware, and software. This approach has made it difficult for operators to mix and match innovations and has proved to be a significant barrier to entry for smaller vendors.
OpenRAN is a vendor-neutral approach with standardised designs that allow a variety of firms to supply hardware and software. Operators believe this can increase innovation, reduce costs, and reduce dependency on the ‘big three’ of Ericsson, Huawei, and Nokia.
European OpenRAN
Earlier this year, Deutsche Telekom, Orange, Telefonica, TIM, and Vodafone signed a memorandum of understanding (MoU) outlining their commitment to create a framework for the creation of a European Open RAN ecosystem.
By working together, the five groups hope to stimulate the market and also encourage support from European governments and the EU. Specifically, they want governments to help fund developments R&D and testing and to incentivise supply chain diversity by lowering the barriers to entry.
Although there are many commercial reasons for adopting OpenRAN, the telcos believe these goals align with wider policy ambitions of European governments and therefore there is a common interest in cooperation that will yield further economic and regulatory support.
The UK, for example, sees OpenRAN as a vehicle to fill the vacuum left by Huawei in its 5G deployment.
A new report commissioned from Analysys Mason has warned that Europe only has just 13 major OpenRAN players compared to 57 in the rest of the world. More concerning is that many of these European players are at the early stage of their development are yet to secure commercial contracts.
Furthermore, European vendors are not present in all six major technology and service categories that comprise the OpenRAN ecosystem, most notably cloud hardware. In other areas, such as chips, they are outnumbered by manufacturers from other regions.
Should the decision not be rectified by 2026, analysts warn that Europe risks forfeiting the economic and strategic benefits of OpenRAN because operators will have to look elsewhere for equipment and software.
“Policy in the US and Japan, among other countries, already strongly backs OpenRAN,” said Caroline Gabriel, Research Director at Analysys Mason. “The US has earmarked more than $1.5 bn to fund OpenRAN, and Japan offers financial incentives and tax benefits for companies which develop, supply, and deploy related equipment.
“While there are some positive examples at national level, for example Germany, today, the European Union as a whole is falling woefully short of providing the necessary support for Open RAN, putting at risk the future viability of a European ecosystem able to compete with other regions in the world.”
The report has issued five key recommendations. IT calls for “high level” and consistent political support that aligns OpenRAN as a strategic priority, while it also wants the EC to create a specific group and roadmap like it has done for cloud and chips. Unsurprisingly, the report calls for additional funding for operators, vendors and startups and it wants to ensure that European leadership is promoted when agreeing global standards. Finally, the report says there should be international cooperation to ensure a secure, diverse and sustainable supply chain.
Should these recommendations not be adopted, there is a risk that Europe could miss out on a sizeable chunk of a market worth €36.1 billion by 2026.
Here are our best 5G mobile phone deals that will use the networks OpenRAN should help build in the future.
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