With the upgrading of mobile communication technology, communication equipment vendors have gone through several rounds of integration, and finally ended the painful competition of princes in the 3G era, ushering in a relatively stable period of Huawei, Nokia, Ericsson, and ZTE's four strongest. Competition with each other is still inevitable, but the huge cheese formed by the investment in 4G networks of more than 800 mobile operators around the world can only be shared among four or five vendors. The benefits of the four major vendors who don’t have to worry about survival are actually In agreement, it is not an exaggeration to call them "Huaweis". Their common vision is how to continue the relatively monopolistic market structure in the 5G era.
However, "small changes" are actually taking place, and the "cheese" protected by "Huaweis" with closed organizations such as 3GPP and GSMA and their strict communication standard systems is no longer a ban.
At the 2018 TIP Summit held in London recently, the two major European operators Vodafone and Telefonica announced in a high profile that "OpenRAN is the future" to shake up the traditional radio access network (RAN) market, and announced The communication industry’s first OpenRAN RFI won the bid to prove that they are serious about moving the cheese of "Huaweis".
In the entire mobile communication network, the radio access network (RAN) is the primary connection point between the user terminal and the core communication network. It is the most basic, most widely distributed, most used, and therefore the largest part of the operator’s investment. Consultation According to the survey by Analysys Mason, investment in RAN accounts for about 55% of operators’ total CAPEX; global operators’ investment in RAN exceeded US$70 billion in 2017, and more than 95% of this share is firmly established. It is in the hands of Huawei, Nokia, Ericsson and ZTE.
The high-profile OpenRAN announced by Vodafone and Telefónica this time is a software-centric open source project that builds 2G, 3G and 4G wireless solutions based on neutral hardware from general-purpose vendors. Its purpose is to decouple the software and hardware of traditional telecommunications equipment, replace traditional special equipment with general-purpose hardware, and realize modular networking of equipment of different manufacturers with general-purpose processing (GPP) "open" interfaces, so as to relieve a single equipment vendor from BBU and RRU It will eventually break the monopoly of the "Huawei" on the radio access network (RAN) market to further reduce network construction costs and improve operational efficiency.
Faced with the network pressure caused by the OTT traffic surge and the financial pressure of not increasing revenue, cost concern has become a priority for telecom operators, especially in the wireless network, which accounts for the majority of investment, and they urgently need to introduce new technologies And new manufacturers to initiate new changes.
Yago Tenorio, head of network strategy and architecture of Vodafone Group, said bluntly at this TIP summit: "In the past few years, we have been thinking about how we can ignite this industry and introduce new suppliers." David del Val Latorre, CEO of Telefónica’s research and development, further explained, “We hope to create an ultra-low cost architecture on the RAN. Therefore, we need a new cost architecture that can provide the same performance as existing network equipment. Wireless equipment, so this solution can only be open."
In June 2018, the two operators issued an RFI including 650 requirements for small and medium innovative companies in the industry, covering the OpenRAN platform, wireless hardware, 2/3/4G functions, baseband and base station controllers. And other needs. After four months of evaluation, Parallel Wireless, Mavenir and Altiostar stood out from more than 20 bidding companies and formally joined the OpenRAN program to cooperate with operators to snatch the cheese of "Huaweis".
According to the plan, Vodafone will arrange for Parallel Wireless to start a new pilot of OpenRAN in Turkey in the fourth quarter of this year, and Mavenir and Altiostar in Africa in the first quarter of next year. When Yago Tenorio, head of network strategy and architecture of Vodafone Group, announced the results, he said that the purpose of these three pilots is to test operations and business models, so they will all be large-scale pilots. At the same time, Telefónica will also cooperate with these three companies to simultaneously launch large-scale pilot projects in Peru and Colombia in South America.
As a result, Parallel Wireless, Mavenir, and Altiostar, which are regarded as driving forces for innovation and change in the RAN market by Vodafone and Telefónica, have been pushed to the height of "giant killers" in one fell swoop. Then these new cheeses that will move "Huaweis" What are the suppliers?
Parallel Wireless claims to be a leader in end-to-end 2G, 3G and 4G open radio access network (RAN) solutions. It has received 27 industry awards for its innovation and excellence in the multi-technology vRAN field. Parallel Wireless’s strategy is to redefine the wireless infrastructure market so that operators can deploy cellular networks as easily and cost-effectively as enterprise Wi-Fi. The founder and executive team of Parallel Wireless are mainly from Bell Labs of AT&T and Lucent.
Mavenir claims to be the industry's only 100% software-driven, end-to-end cloud-native network software provider. The company's main strategy is to occupy a leading market position in fully virtualized and 5G-ready software solutions at all levels of the network infrastructure stack, and to help communication service providers adopt cloud services and realize network virtualization. Mavenir is currently able to provide a fully virtualized end-to-end next-generation core network and access network including VoLTE, VoWiFi, vEPC and Cloud RAN. The company's founders and senior management team are mainly from Alcatel-Lucent.
Altiostar claims to be the first provider of vRAN solutions in the mobile broadband industry. The company's main product is to provide wireless access equipment for the LTE market to address outdoor coverage and indoor capacity requirements. Compared with traditional wireless equipment, the company's vRAN solution can reduce the total cost (TCO) by 20%-30%. The company's senior management team is mainly from Cisco.
It can be seen that these three are all innovative technology companies from the United States. Most of their founders and senior management teams are from traditional telecommunications companies. They understand the pain points of operator customers and the weaknesses of rival telecommunications equipment vendors, and they are all committed to By adopting innovative open architecture and cloud technology to subvert traditional communication solutions, lower cost and higher efficiency are their main selling points to impress operator customers.
Judging from the results of the OpenRAN RFI, their selling points have indeed hit the pain points of operators. According to the forecast of the consulting agency Analysys Mason, driven by 5G investment, global operators’ CAPEX investment will increase from US$139.7 billion in 2017 to US$181.7 billion in 2025; and consulting agency IDC’s forecast of global operator business revenue is From 2017's 27.9 billion U.S. dollars all the way down to 27.38 billion U.S. dollars in 2022.
To solve the contradiction between declining revenue and increasing investment demand is an important driving force for Vodafone and Telefónica's large-scale OpenRAN live network pilot. The life of the operators is not easy, they have to "move" the cheese of the equipment supplier. Telefónica executives said that they assessed that the OpenRAN solution will reduce the average cost of network coverage per resident by 5-10 times, and reduce the cost of data traffic by 3 times .
Unlike other wireless technology virtualization organizations (such as xRAN Forum) that focus on specifications and network architecture research, the OpenRAN plan led by Vodafone and Telefónica under the TIP organization emphasizes implementation and software and hardware delivery, so they are very serious Promote the commercial timetable of OpenRAN. Once they succeed in large-scale commercial trials with Parallel Wireless, Mavenir and Altiostar in Africa and South America, their influence will spread to the same TIP organizations, including Deutsche Telecom, British Telecom, and SK Telecom. ), China Unicom and more than 70 operator allies.
Moreover, although the OpenRAN RFI announced by Vodafone and Telefónica this time is mainly for 2/3/4G, the successful verification of OpenRAN on 4G networks has laid a commercial foundation, and then with the help of network slicing features, it can achieve the "Huawei" on 5G. The Jedi counterattack is a tacit understanding between the bidding party and the bidding party.
From this point of view, using OpenRAN to break the monopoly of traditional telecommunications equipment vendors and forcibly take away the cheese of "Huaweis", operators are really serious this time! So, are "Huaweis" like little mice sniffing and rushing to "be ready for the cheese to be taken away at any time"?
At least in the TIP organization, only Nokia, a traditional wireless equipment manufacturer, is involved. It is hard to be optimistic. After all, abandoning the old cheese and embracing OpenRAN means for "Huaweis" to tear down the guard wall that was built through huge R&D investment and tragic market fighting, and open the door to steal, especially when IT manufacturers hold high the banner of Cloud. After conquering the business support system and communication switching system of the telecommunications market, the radio access network (RAN) has become the last position that these traditional communication equipment manufacturers can hold on.
If you retire again, there is actually no life left. The goal of OpenRAN is to decouple the software and hardware of traditional telecommunications equipment, replace traditional special equipment with general-purpose hardware, and implement modular networking of equipment of different manufacturers with the general processing (GPP) "open" interface. This means that the radio access equipment (RAN ) In terms of hardware form, the white box and commercialization will no longer exist. Technical barriers will no longer exist. Any manufacturer with general hardware production capacity can enter the battle group. The wireless access network (RAN) market will return to the top four. The bloody rebellious army fought hard.
In addition, the price and value system of wireless access products will be reshaped. Technical competition will focus on the development of communication software functions. However, this highly squeezed market basically cannot accommodate companies with 100,000 employees. The core competitiveness of the OpenRAN era will transform from scale strength to competition agility and flexibility. Parallel Wireless, Mavenir and Altiostar that won the OpenRAN RFI this time are all small and medium-sized software companies with only thousands of employees.
Therefore, although the cheese in front of us has begun to deteriorate, discovering new cheese in the direction of OpenRAN is still a dead end for "Huaweis". Therefore, for the current martial arts leader Huawei and the century-old Nokia and Ericsson, the most important thing is to grasp the 5G cheese "shining alluring light" as soon as possible to fatten yourself, in order to extend the time and Parallel Wireless, The pioneers of OpenRAN, Mavenir and Altiostar, slowly fought the war of attrition.
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