Shabbir Bagasrawala: A Clarion Call for Supply Chain Diversity in Our Telecom Networks
Limited competition is provided by the existing trio of vendors. This worsens the supply chain problem for operators.
April 30, 2021
Challenges with current RAN supply chain
Currently the supply for this equipment is dominated by three vendors: Huawei, Nokia and Ericsson. More than 80 percent of global market share for this equipment is owned by this trio, thus making networks in many countries overly dependent on them.
The radio equipment that goes on the towers, the adjunct equipment deployed at the bottom of the tower and the software is a proprietary solution provided by one of these vendors. The interfaces connecting the different components are proprietary and closed, making modularity and audits extremely difficult.
The limited competition provided by the existing trio of legacy vendors as well as the regulatory intervention, and even curtailment, of Huawei as a vendor in some regions is leading to a duopoly scenario. This worsens the supply chain problem and often leads to significantly higher costs for the operators who have no negotiating leverage.
The open RAN alternative
Consolidation of the supply chain to this trio has been a problem that the industry as a whole has been examining even before the pandemic. Initiatives such as the O-RAN Alliance and the Open RAN Policy Coalition were formed by mobile services providers and vendors to push for new standards and policies, promoting a new supply chain through open RAN.
Open RAN broadens the vendor ecosystem through the availability of standardized interoperable interfaces between different elements within the RAN. This transforms today’s vertical solution, provided by one vendor, into a modular alternative where each part of the system can be supplied by a number of vendors. Open RAN retains competitiveness and enables the mobile network operator to acquire best-in-class network elements.
By virtue of introducing modularity, there is an opportunity for new vendors and startups to participate in this market and thus drive innovation as well as competition in specific niches of RAN functionality.
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