Global 5G Competition Upgrade Open source technology will break the rules of the game?

At a time when the US is taking an open-source stance to “enrich ammunition” for European companies, China is turning its supply chain to its Asian neighbours. U.S. defense officials are reportedly urging U.S. telecommunications equipment makers to take more aggressive steps to develop local 5G products in search of more alternatives. Lisa Porter, the U.S. Department of Defense’s research and development official, has asked U.S. companies to develop open-source 5G software, such as radio access networks, and to open up to potential competitors.

This allows Ised Service Providers (ISPs) and operators to be effectively compatible with paired hardware devices without being restricted to a single vendor. Mr Porter warned that if US companies did not adopt an open source approach, they would lag behind their rivals in the 5G competition.

The industry believes the technology, known as open wireless access networks, or OpenRAN, could upend the rules of the game in the traditional base station equipment market. However, some people think that the ideal is very beautiful, the reality is very bone-felt.

“There are no 5G vendors in the U.S., and open source systems need to start from scratch, ” Liu Wei, an analyst at Gartner, a research firm, told First Financial. While 5G open source and softwareization have been the subject of discussion, open source has been slow because the current ecosystem is not complete and some key issues have not yet been validated, such as how to save money and energy on commercial networks. “This has prompted the US to use the power of European 5G suppliers such as Ericsson and Nokia to make up for its technical shortcomings.

And at a time when the US is taking an open-source stance to “enrich ammunition” for European companies, China is turning its supply chain to its Asian neighbours.

Global 5G Competition Upgrade Open source technology will break the rules of the game?

U.S. urges companies to develop 5G open source software

Open RAN, or open wireless access network, is through the software open source, interface open and hardware white boxtoemer to achieve modular set-up base station. It is part of the Tip Network, launched by Facebook in 2016 to deploy telecommunications networks based on open source software and hardware.

Through software and hardware decoupling and interface opening, the plan breaks the traditional telecommunications equipment hardware and software integration, interface highly integrated “black box” type architecture, so that operators can use software from different suppliers, general hardware to achieve modular hybrid networking, so as to avoid being locked by traditional equipment suppliers, reduce costs, improve bargaining power.

Simply put, this allows operators to purchase software from A suppliers, COTS servers from B suppliers, and RRH equipment from different suppliers to implement modular group stations, rather than using only a single manufacturer’s “one-stop” solutions, such as Huawei and ZTE.

Although the U.S. has the upper hand in 5G’s core technology, 5G mmwave technology, Mr Liu told First Financial: “Although technically the US is a leader, the suppliers are companies such as Ericsson, Nokia and Samsung.” ”

Unlike China’s Huawei, which offers a full suite of 5G network solutions, from radio access towers to routers, the biggest challenge in the US today is that no local company can provide end-to-end 5G solutions, for example, no U.S. manufacturer can make radio access towers.

Sheng Linghai, vice president of semiconductor research at Gartner, told First Finance that there are currently no suppliers like Ericsson in the U.S. that require open source development for vendors with this technology, which can be seen as a shortcut to developing technology.

As you can see, once Open RAN is scaled, RAN software vendors have start-ups from the United States, and general-purpose chips are provided by Intel, which not only may reshuffle the 5G wireless device market, but the entire ecosystem is currently beneficial to the United States. However, the challenge is that requiring U.S. companies to open up their 5G technology to potential competitors will undoubtedly undermine the competitiveness of some companies.

“The purpose of open source is to get more people to use your hardware and platform and then make a profit. Sheng Linghai told reporters that the key is how to make the middle agreement, want to let the company open up core technology free of charge, this business is not so simple. Communication facilities are basic services that act as a pipeline (possibly) of value-added profits generated by developers after open source is not available.

Ericsson executives once said that open source, like standards, would be a good thing if it wasn’t too much, and that too much open source would fragment and spread too much resources among too many groups. If there’s one thing new, it’s that every company is trying to move toward a higher level of architecture, and components and services can be built and delivered in new ways.

The Us government had previously asked Oracle and Cisco to consider entering the radio transmission market, but the company refused. It has also forced the US government to consider funding 5G suppliers in Europe, such as Nokia and Ericsson, to make up for the technical shortcomings.

Mr Porter said the technology of Ericsson, Nokia and Samsung was already capable of providing the technical capabilities for 5G development. Still, she called for more U.S. companies to invest more in open source technology, allowing operators to source from different suppliers. But that could threaten the interests of software equipment makers such as Oracle and Cisco, as operators will have a wider choice.

Open source ecology to be established

“We believe that the more open you are, the more the U.S. and European allies will benefit. “It’s like we’re following the development of historical data servers and other technologies. If the 5G ecosystem is not open, she argues, it could lead companies to repeat Kodak’s fate in the digital imaging age and Nokia’s elimination in the smartphone age.

U.S. officials are considering tax breaks to help develop the open source technology and attract more vendors to join, sources said.

Judging from global market trends, some operators are also experimenting with 5G open source technology. From the operator’s point of view, let more competitors into the game, break the current market pattern monopolized by 3 to 4 equipment manufacturers, thereby improving bargaining power, reduce procurement costs, is the starting point of these options.

Two months ago, Vodafone, the multinational telecoms giant that owns and operates communications networks in 25 countries around the world, announced the launch of the OpenRAN trial, which includes rural markets in South Africa, Turkey, Congo and Mozambique, as well as the UK. Once successful, the trial is expected to be rolled out to Europe.

Vodafone said the scheme would introduce a new group of 2G, 3G, 4G and 5G technology suppliers, which it hopes will increase the number of telecom equipment suppliers and improve the flexibility of its supply chain.

It is understood that the TIP Alliance currently has more than 500 members, including operators, equipment manufacturers, chip makers, IT vendors and system integrators, of which Vodafone, Telefonica, Deutsche Telekom, BT, SK Telecom, Nokia, Intel, Samsung and so on are the main members. Previously, Samsung has introduced 5G RAN solutions that support open interfaces and multi-vendor support, and Ericsson has joined the O-RAN alliance.

Notably, three U.S.-based software companies, Altiostar, Mavenir and Parallel Wireles, are also star members. These companies primarily provide operators with end-to-end cloud-native network software, and products are already on the ground.

In January 2019, for example, Rakuten Mobile, a new Japanese operator, announced that it would build the world’s first end-to-end, fully virtualized cloud-native mobile communications network, with THE RAN software provider Altiostar. In August 2019, Dish, a new U.S. mobile operator, also announced the creation of an end-to-end, fully virtualized cloud-native 5G network, with Altiostar also on the vendor list.

At present, TIP designed 5G technology has covered access, backhaul and other fields.

However, there are also people in the industry believe that the ideal is very beautiful, the reality is very bone-felt. “From the 2G to 5G era of operator support systems, the past by the server, operating system, database vendors, to business support system development and integration, is extremely decentralized, is fully decoupled, to the later step by step development and concentration, to the 5G era Huawei can provide the entire industry chain of equipment and management systems, Operating support systems show that the efficiency of over-decoupling is not keeping pace. Huawei has even customized the operating environment of servers and databases, including CPUs, in order to efficiently and cost-effectively address the pressures of the operators themselves. The move from hardware to software may not reduce costs and could cause more problems, the people said.

In addition, patents are also a “roadblock” to open source programs. Huawei’s market share in communications equipment is 28 per cent, followed by Ericsson with 27 per cent and Nokia at 8 per cent, according to Dell’Oro, a consultancy. U.S. companies are not on the first tier. Meanwhile, as of September this year, Huawei had an absolute commanding position of 3,325 applications for 5G SEP patents worldwide, according to a new report by IPlytics, a German patent data company.

If you want to disrupt the market of traditional communications equipment manufacturers, you may face a huge patent wall.

At the same time, the maintenance costs of 5G base stations are high. 5G scenario for the vendor service level requirements more stringent, once the failure, the use of open source program operators to find what kind of vendors to deal with the problem in a timely manner, how to distribute the benefits, are around the open source 5G project problems.

Japan supply chain benefits from China’s 5G investment

Although South Korea and the United States have pioneered the 5G network, china is rapidly catching up because of its limited coverage and difficulty in gaining popularity. In June, the Chinese government issued 5G licences and allowed China Mobile, China Unicom and China Telecom, the three big mobile operators, to launch services in October, gaining 9m 5G users in their first month.

China is expected to have 600m 5G users by 2025, or 40 per cent of the world’s total, according to the GSMA, a London-based industry group. There will be a need for large-scale investment steam behind this. Goldman Sachs estimates that China will invest more than $150bn in 5G by 2025.

Japanese companies have been helped by China’s push for 5G industry. Huawei invested 780 billion yen ($7.2 billion) in Japan in the three quarters from January to September, up 60 billion yen from last year, according to data cited by the Nikkei Asia Review.

Liu told First Financial that in addition to the United States, Japan is also a champion of 5G open source, very insist entised with the direction of open source. Japan has a complete 5G supply chain, and open source will benefit more Japanese manufacturers.

“To be truly popular with 5G, it will need countries around the world to remain open and work together,” Said Yukio Ozawa, executive vice president of Canon Group, on First Finance. China’s rapid development in mobile communications, the Internet, artificial intelligence and other fields, especially in the 5G era, provides a rare opportunity for Japanese enterprises to develop, and Japanese companies in the parts precision processing and manufacturing, semiconductors, chemical materials, imaging technology and other fields have advantages, will also help China’s 5G industry to accelerate the development and upgrading. “

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