Building supply chain resilience in telecommunications: the Quad’s role in accelerating open RAN adoption

Open radio access network (RAN) technology has featured in key bilateral and multilateral partnerships in the past year. It has been mentioned in the critical technology partnership between the United States and India. Additionally, it has featured in a joint statement between the United Kingdom, Australia, Canada, and the US regarding telecommunications supplier diversity. Open RAN was discussed in the Quad leaders’ summit. It’s very unusual for an esoteric telecom industry term to be referenced in statements of national leaders, and it’s a sign of the increasing linkage between technology and national power.

The mobile telecommunications industry has high entry barriers and is dominated by a few big companies—Ericsson, Nokia, Huawei, ZTE, and Samsung. The RAN provides the last-mile connectivity for mobile networks and includes a network of cell towers (or base stations) and other equipment that transmit and receive radio signals to provide wireless coverage. When you make a call, send a text, or use mobile data, your mobile device communicates with the RAN to establish a connection and transmit data. This part of the network is estimated to account for at least 60% of the capital and operating expenses for the mobile network operators.

Open RAN is not a new technology but defines standardised interfaces that make components from different vendors work together. It makes it possible to have a plug-and-play installation of different components from multiple vendors. This allows smaller vendors to enter the market by building interoperable and modular components. It began as an initiative by network operators and aims to reduce entry barriers, promote competition, reduce costs and avoid vendor lock-in by disaggregating the RAN ecosystem. With bans on Chinese vendors by many states, the vendor pool has become even more concentrated, and amid concerns about supply chain resilience in something as critical as mobile communication networks, open RAN has become a means to nurture alternatives to the dominant vendors.

The major challenge with open RAN is the increased complexity and cost of multi-vendor deployments. Such infrastructure has traditionally been deployed from a single vendor offering an end-to-end solution. Opting for a single-vendor solution, even if it is open RAN compliant, undermines the core purpose of open RAN which is to promote vendor diversity. Operators traditionally have not been responsible for integrating components from multiple vendors, making this an exceptionally demanding endeavour. Additionally, security risks are also associated with integrating components from multiple vendors due to the increased threat surface of additional interfaces and the absence of a single entity responsible for securing the network. Markets left to themselves might not adequately solve the issue due to the market concentration in the supply chain and the significant initial hurdles in deploying open RAN. The Quad countries should address these challenges.

Open RAN deployments are more costly in the near term than conventional systems. The traditional RAN deployments are single-vendor end-to-end offerings, allowing vendors to cut down on marketing and distribution expenses, minimise inventory requirements, and enhance the overall value of orders. To overcome the cost deterrent, the Quad could help incentivise open RAN solutions for operators. The incentives should also promote multi-vendor open RAN deployments over single-vendor solutions. In June last year, Prime Minister Narendra Modi and President Joe Biden reaffirmed technology’s defining role in deepening the strategic partnership between India and the US and lauded ongoing efforts through the Initiative on Critical and Emerging Technology (iCET). This includes a 5G open RAN pilot with a leading Indian telecom operator using equipment from a US open RAN manufacturer.

More such deployments across other geographies backed by the Quad can demonstrate scalability and can build confidence and economies of scale to encourage wider adoption. Such initiatives also help telecommunications regulators build capacity to deal with the additional complexity of evaluating and authorising open RAN solutions and operators to cultivate the skills to operate and maintain such systems.

The Quad should also fund and support initiatives to screen open RAN components for malicious hardware or software and certify them as safe. The Telecom Infrastructure Project is one such initiative. It is a global engineering-focused collaboration between companies that evaluates, validates, and certifies open RAN components from different vendors. Such initiatives offer a means of addressing the security concerns of open RAN deployments. They also offer a pathway to take advantage of the cost-effectiveness of equipment provided by Chinese vendors while mitigating the potential national security risks. Selectively sourcing certified non-intelligent components from Chinese vendors would not pose a significant national security danger and would significantly reduce operators’ infrastructure costs.

Prevailing market trends suggest that Open RAN is here for the long term despite the slow uptake. Collaborative measures to build stakeholder capabilities, address security concerns and showcase real-world scalability can boost open RAN adoption and address the concerns around supply chain resilience in communication systems.