Single-Vendor Open RAN—a Double-Edged Sword?

The Open Radio Access Network (RAN) market ended 2023 with a landmark contract by AT&T, as well as a separate announcement by Deutsche Telekom, and announcements have continued during the start of 2024. In February 2024, Verizon announced that it had deployed 130,000 Massive Multiple Input, Multiple Output (mMIMO)-capable Open RAN baseband units in its commercial network.

However, both of the U.S. operators have adopted a mostly “single vendor” approach. AT&T will primarily work with Ericsson to build out its Open RAN capabilities, and Verizon has been deploying primarily Samsung radios. Deutsche Telekom, on the other hand, is focused on the multi-vendor Open RAN capabilities at its “O-RAN town” in Germany with Nokia and Fujitsu, among others, and promoting a fully multi-vendor environment.

While these announcements are some of the major ones, they are not the only ones in the past few weeks. Three UK announced a small-scale trial in Glasgow deploying Open RAN small cells, collaborating with Mavenir, Accenture, Boldyn Networks, and more. This is in line with the larger Open RAN aspirations of Vodafone UK, which is in the process of merging with Three. The nature of all of these Open RAN announcements indicates that while operators are willing to adopt Open RAN, the multi-vendor approach is not the preferred choice, as the trust established by legacy vendors with operators makes them the safer choice for large-scale deployments.

Several additional factors currently make the single-vendor approach more appealing to operators. First, engaging with just one vendor streamlines contract negotiations and the provision of long-term support services. Second, the upfront cost of implementing a single-vendor solution is presently lower in comparison to a multi-vendor solution, which is key as the industry is placing a significant emphasis on prioritizing monetization in 2024. Lastly, the simplicity of the integration process further adds to the attractiveness, as all components were designed by the same vendor, so they are certain to work effectively and allow for a quicker path to deployment.

A continued wave of single-vendor Open RAN deployments poses some potential dangers for the market:

• Long-Term Market Consolidation: As this market continues to grow and mature, it is likely that while these early contracts are being completed, a number of incumbent vendors could drop out of the market as they simply do not win enough contracts to remain viable. This reduces the number of choices for operators once they are ready to adopt a truly multi-vendor approach.
• Vendor Lock-in: As certain partnerships between vendors form to ensure that their components work well together, should an operator choose to switch to a new vendor, even if the component is the better choice on its own, the performance could not match the existing choices as there would be tighter coupling between the components than a third-party choice.
• Stagnated Innovation: If the market continues to be dominated by single-vendor solutions, there could be less incentive for vendors to innovate, which could slow the pace of technological advancements for Open RAN, including reaching the objective of true network disaggregation.

The expected boom in Open RAN deployments is a great thing for the industry, whether it is multi-vendor or not. However, significant single-vendor deployments could move the market away from Open RAN’s true goal of multi-vendor interoperability. The continuation of Proofs of Concept (PoCs) and trial announcement indicate that operators have not given up on the multi-vendor concept, but rather that it is not ready for large-scale deployment. ABI Research believes that both operators and vendors must play a role in ensuring that the Open RAN market does not “close” itself off to only a handful of vendors:

• Operators:
  • Operators must continue to perform trials and conduct PoCs to drive innovation and improve the interoperability of vendor components. These trials will address any failings that multi-vendor approaches may currently have in comparison to single vendor solutions and will accelerate the rate at which the performance and cost gap between the two is bridged.
  • Operators can create vendor ecosystems through partnerships, programs, and financial investment, which include a variety of legacy, established, or incumbent vendors in the Open RAN market. This can drive innovation and foster healthy market competition.
• Vendors:
  • Vendors should make offering integration services a priority alongside their portfolio. This can reduce the perceived risk and complexity associated with multi-vendor approaches for operators, especially for incumbent vendors.
  • Vendors must ensure a continuous dialogue is maintained with operators to gain an in-depth understanding of their pain points and specific needs. This can be achieved through joint development projects and customized solutions. The built trust and better understanding of the vendor for the operator can allow it to be more receptive to working with the vendor for commercial deployments.