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Open RAN

Open RAN

Ericsson CEO parks Open RAN in the 6G era

Ray Le Maistre
By Ray Le Maistre

Jul 16, 2021

Börje Ekholm, President and CEO of Ericsson

Börje Ekholm, President and CEO of Ericsson

  • CEO Börje Ekholm says Ericsson supports Open RAN
  • Sees peripheral role for open, disaggregated RAN systems in 5G
  • Says Open RAN set to be a fundamental part of 6G

For incumbent radio access network vendors like Ericsson, Open RAN has developed from an irritating but distant drum beat in 2019 into an annoying and repetitive chorus in 2021: Now Ericsson’s CEO, Börje Ekholm, has decided it’s time to join the choir and make some of the right noises – but he’s definitely not singing from the exact same hymn sheet as Open RAN’s leading vocalists.

Talking during the vendor’s second quarter earnings webcast, which included the bombshell about the company’s shrinking business in China, Ekholm mentioned Open RAN in his opening address. “We have continued to show great progress in our product portfolio, highlighted by the addition of the 5G mid-band and massive MIMO support to our Cloud RAN portfolio. Cloud RAN is a critical element in our product portfolio, as this will enable our customers to evolve their networks towards a cloud native architecture and open network architecture, leveraging automation and fully autonomous networks. Ericsson has always been and always will be a strong believer in openness in mobile networks, and we will work in close partnership with our customers to leverage the benefits of the open architecture. We take the same approach to Open RAN solutions, and we are actively participating in the standard bodies in Open RAN,” he noted, referring to the vendor’s participation in O-RAN Alliance specifications development. 

Indeed, Ericsson is a participant, though many regard it as a wolf in sheep’s clothing in that regard, as Ekholm has previously identified the Open RAN movement as a competitive threat and conceded that the vendor’s revenues are likely to be impacted by the demand for Open RAN systems from rival vendors by 2023: He made that prediction in October last year, since when many major network operators have pledged to deploy Open RAN as part of their networks as soon as feasible and, in the case of the European operator MoU collective, provided the vendor community with details of exactly what they are looking for from commercial disaggregated RAN systems. (See Ericsson CEO sees Open RAN impact from 2023, Middle East operators forge Open RAN pact and Open RAN MoU operators publish their tech wish list.)

So when a financial analyst asked whether Open RAN was likely to have much market impact in the 5G era, or whether, because so much investment was being ploughed into 5G RAN systems from Ericsson, Nokia, Huawei and ZTE right now, it wouldn’t really play much of a role until 6G loomed into view, Ekholm didn’t hesitate to approve that sentiment.

Open RAN is “clearly something that will happen and that's what we are investing for as well. We see, in reality, the first step to be the Cloud RAN portfolio that will allow our customers to migrate towards an open architecture. It will take a few years before we have a fully operational Open RAN solution and we can debate how long that will take… but there is a question of here and now, of building out 5G coverage, and that's what we also see our customers doing. But, of course, we need to work with our customers here to make sure that they have the best solution. And it may well be that Open RAN can have certain applications earlier, where you have less performance demands… rural coverage, for example… Open RAN will be a fundamental part of the 6G solutions, there’s question in my mind. But exactly how it's going to pan out in the meantime remains to be seen – it depends on how the technology matures,” added Ekholm. 

But, of course, if things mature a bit earlier than expected, he says Ericsson will be ready to deliver whatever operators need. “We believe purpose-built networks can deliver the performance that's required in 5G today. By the time Open RAN is ready we will also be there with solutions, but we don't feel it's the right time right now [to] divert focus from actually what goes on in the market,” stated Ekholm. 

And what is happening right now is that operators are accelerating their 5G RAN investments in a market that is currently worth about $38 billion a year (or possibly more): Research house Dell’Oro has just updated its outlook for the global RAN market for this year, upping its year-on-year growth guidance from 3% to 10%. The same company expects Open RAN to capture only a fraction of the total RAN market this year (low single percent share) but to account for more than 10% of the overall RAN market by about 2025. 

And while many operators are keen to accelerate the pace of Open RAN developments and enable these open interface-based systems to achieve performance and functional parity with ‘purpose-built’ systems as soon as possible, operators are not waiting for that time to come before they invest heavily in their 5G access networks.

And, as we have seen this week, there are some major operators that, like Ericsson, see Open RAN playing at most a peripheral role until much later this decade. (See BT’s CTO: Huawei swap-out first, Open RAN later.)

There are also those that believe incumbent vendors such as Nokia (which has been more positive and bullish about Open RAN than its Swedish rival) and Ericsson will sweep up much of the Open RAN business when the market takes off as operators opt to retain their prime supplier relationships while at the same time benefitting from the operational and (the operators hope) economic benefits that open systems could deliver. (See Telcos to ramp Open RAN investments with traditional major vendors, predicts Appledore Research.)

It’s likely that Ekholm will find himself faced with questions about the impact of Open RAN every time he offers himself up to a Q&A audience and, currently, he can easily play a relatively passive role and whistle slightly out of tune, and out of time, with the emerging market challengers – that may change come 2023.

- Ray Le Maistre, Editorial Director, TelecomTV

Related Topics
  • 5G Evolution,
  • Analysis & Opinion,
  • Asia-Pacific,
  • Ericsson,
  • Europe,
  • Global,
  • News,
  • North America,
  • Open RAN,
  • Open Telco Infra,
  • Radio Access Network,
  • Telecoms Vendors & OEMs

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