Ericsson and Nokia’ 5G duel moves to Taiwan

Both Ericsson and Nokia have won 5G RAN work with Taiwanese telco Chungwa Telecom, which they’re happy about.

In what is becoming a bit of a thing, Nokia and Ericsson simultaneously issued press releases announcing their 5G deal wins with Chungwa. This follows a similar PR race over Japanese MNO KDDI last month, except this time it looks like Ericsson got a bit more of the action. It’s also part of the broader industry pissing competition narrative that we chatted about in this podcast.

Ericsson will be helping Chunghwa out with its mid and high-frequency 5G radios on both an NSA and SA basis. On top of that it seems to be the sole supplier for the 5G core and will even provide fronthaul and IP backhaul transport. Nokia, meanwhile, is a lot less specific in its press release, just referring to NSA and SA 5G radio over multiple bands.

“Our enhanced 5G platform perfectly suits CHT’s needs to quickly launch new services to the market,” said Chafic Nassif, President of Ericsson Taiwan. “This cooperation will serve to not only provide Taiwanese consumers and enterprises with the highest quality communication services but also accelerate the overall progress of 5G development in Taiwan.”

“Our technology will assist Chunghwa Telecom in its early launch of 5G services in Taiwan, while also allowing it to explore new revenue generators across consumer and enterprise markets,” said Tommi Uitto, President of Mobile Networks at Nokia (do they not have a Taiwan dude?). “As one of the pioneering members of Chunghwa Telecom’s Taiwan 5G Alliance, we will jointly promote the digital transformation for public and private sectors to accelerate 5G momentum in Taiwan.”

“In the process of upgrading to 5G networks, we need to shorten the time it takes to launch new features,” said Max Chen, President of the Mobile Business Group at Chunghwa. “Ericsson’s 5G core solution enables our 4G core to flexibly evolve into a shared 4G/5G network. Meanwhile, Ericsson’s Cloud VoLTE solution will allow our customers to enjoy a more convenient and higher quality 4G voice service today as well as 5G voice services in the future.

“The transformation empowered by Nokia’s 5G technology will undoubtedly revolutionize the way we interact with the world. Chunghwa Telecom is committed to delivering industry-leading 5G to its consumer and enterprise customers, and we have every confidence in Nokia delivering this in a quick and reliable rollout.”

Chen’s Nokia comment was definitely weaker than his Ericsson one, wasn’t it? Nokia is always going to publicise its deal wins, but this announcement had a defensive feel to it and Nokia presumably knew Ericsson got a bigger piece of the action this time. So that seems to be one-all in East Asia for the two Nordic kit vendors and the season may well be suspended before we get a chance to go to extra time.

Indosat Ooredoo the latest to join the OpenRAN race

With OpenRAN enthusiasm stampeding through the industry, Indosat Ooredoo is the latest telco to join the race.

Indosat Ooredoo will become the first telco in Asia to push forward with OpenRAN trials as the team searches for cost effectiveness and accelerated network deployment in Indonesia. The field trials will be up-and-running by April, focusing on the least developed regions of Indonesia.

As part of the initiative, Indosat Ooredoo will also establish the first TIP Community Lab in South-east Asia during the second quarter. This will be the twelfth TIP Community Lab to be opened worldwide in what will act as a telco-neutral platform for the telco community to trial solutions, to drive through interoperability and test market readiness of products.

“Only through collaboration can we accelerate the pace of innovation in telecom networks; we are excited to see the Indonesian telecoms community rallying together for this purpose,” said Attilio Zanni, Executive Director of TIP. “This is the beginning of a transformation journey in Indonesia – as the telecoms community and Indonesian citizens reap the benefits of a locally tested and deployed TIP-led solution, and a stronger supply ecosystem.”

“Indosat Ooredoo has a similar vision with the Government to create an effective and equitable digital ecosystem throughout Indonesia and encourage the emergence of local players,” said Ahmad Al-Neama, CEO of Indosat Ooredoo. “We hope this collaboration will accelerate the creation of a healthier industry and improve the digital economy and better life for the people of Indonesia.”

Specifics for the project are still thin on the ground for the moment, though perhaps this is intentional. Indosat Ooredoo has spoken about encouraging a local ecosystem, and perhaps this will be favoured over the internationally recognised OpenRAN players.

While OpenRAN is collecting interest from telcos all over the world, Indonesia is one of the regions for which the technology can offer the biggest benefits. As a nation where the connectivity industry still has a lot of headroom for growth, ARPU and a significant digital divide has faltered progress.

The promise of OpenRAN, disaggregated software and hardware, could lead to alternative vendors and commoditised equipment to drive down deployment costs. The theory is a revolution, breaking the shackles of the traditional vendor community and inspiring competition for lower costs.

Aside from these trials, Etisalat is trialling OpenRAN across the Middle East and North Africa, while MTN is another which has promised to implement OpenRAN over 5,000 sites across Africa. Turkcell is driving its own implementation in Turkey and IpT Peru is a new telco running trials in Peru.

Although the vast majority of these trials are taking place in the developing markets, the promise of OpenRAN can also help address rural connectivity issues in more developed markets. Vodafone and O2 in the UK are two telcos in the UK making use of OpenRAN to fill in the pockets of poor connectivity in the more sparsely populated regions of the country. Rakuten in Japan is another telco driving forward, though this is one telco not inhibited by the crutch of legacy networks.

The issue which does remain is whether the performance of these decoupled products can match that of the status quo. OpenRAN might be exciting but the likes of Ericsson, Nokia and Huawei have been honing their own solutions for close to a decade. It might be some time before this embryonic technology can match up, but while telcos are facing up to the enormous bill to deploy 5G and full-fibre networks, any proposals to save a bit of cash here and there will certainly be appreciated.

Nokia cautions Senators on plans to control technology decisions

One Senate subcommittee is searching for the silver bullet to the network infrastructure conundrum, though Nokia and other industry figures have warned against politicians making procurement decisions.

The Senate Committee on Commerce, Science, and Transportation has been hearing testimonies from various industry figures to examine the security and integrity challenges for telecommunications networks. The objective is to create regulation and legislation which benefits all, except the Chinese, and maintains security principles.

But in the pursuit of national security, some in the industry question whether the US Government is extending its influence too far into the business operations of the telcos. One concern which has been raised is if it would be a sensible decision to legislate what technologies the telcos have to use.

In his opening statement, Subcommittee Chairman Roger Wicker not only condemned Chinese vendors and the threat posed by China in the digital economy, but suggested Government should be playing a more active role in the development of standards and deployment of 5G. This is all well and good, until Government starts to make telco decisions for the telcos.

Below, we have taken a few extracts from the testimonies to demonstrate the concern from the telco industry.

Steve Berry, CEO, Competitive Carriers Association:

However, policymakers should not mandate which technologies are used in wireless networks, but instead should encourage research into new, secure technologies to enhance customer choice, innovation, and cost savings. For carriers with existing network infrastructure, additional research may facilitate increased ORAN deployment as well, and it is important that all network operators are positioned to manage additional steps for interoperability across multiple vendors.

Mike Murphy, CTO, Nokia Americas:

In short, there is limited maturity in both ORAN and Radio Access Network virtualization. For this reason, Nokia believes that putting these burdens on rural carriers, the least capable of being early adopters, would be unreasonable and should not be a pre-requisite for federal funding to replace their existing equipment, at this time.

James Lewis, Director of the Technology Policy Program, Center for Strategic and International Studies:

The move to an open, modular approach to telecom will change supply chain dynamics in ways that favour the US (and Japan). The supply chain for telecom will depend on semiconductors, chipsets, and specialized software (including “open source” software), all areas where the U.S. has a substantial lead over China – in some cases there are no Chinese competitors. Estimates of how long this telecom transformation will take range from three years to a decade.

In an effort to combat the attractiveness of Huawei and ZTE technology to small and rural telcos, the US Government has created a Public Wireless Supply Chain Innovation Fund of at least $750 million and a Multilateral Telecommunications Security Fund of at least $500 million. Through these two financial packages, it is hoped viable and commercially feasible alternatives can be created.

As part of securing funding, there is some suggestion in official documents that implementing Open RAN technologies could be a pre-requisite. Encouraging the industry one direction is fine, but forcing telcos, and in this case the likelihood is small telcos, to adopt a technology which is not yet market ready is a potentially worrying path to take. This position has of course not been written into legislation or regulation, but the opportunity to do so is there.

While it is far from uncommon for Governments to want to shepherd the development of an industry, the level of intervention which is currently feared should not be considered healthy. Bureaucrats work in bureaucracies because they are good at bureaucracy. Engineers work engineering projects because they are good at engineering. The status quo seems perfectly acceptable so why should it change.

Sometimes Government should just be Government, and it should let private industry be private industry.

OpenRAN enthusiasm spreads to Turkey

Mavenir has announced Turkcell as its latest customer, with the pair planning to deploy OpenRAN vRAN technologies in the telcos domestic market.

As part of the agreement, Mavenir’s Virtual RAN solution will be deployed on Turkcell Telco Cloud and it will be first workload that will be going live on Turkcell Edge Cloud. Mavenir claims this vRAN architecture and platform can support 4G as well as both the NSA and SA implementations of 5G NR.

“At Turkcell, we have reached more than 60% virtualization in our mobile core network. We already take great advantage of what virtualization has to offer and are willing to extend the benefits of virtualization coupled with OpenRAN for the next step in Turkcell’s Radio Access Network evolution,” said Gediz Sezgin, Turkcell CTO.

“With its broad experience and expertise in RAN technologies and Network Virtualization, Turkcell will make great contribution for innovation on open vRAN towards 5G era. We are excited to take on and lead this journey.”

Turkcell becomes the latest in a string of companies seeking to drive forward with the OpenRAN technologies, though it is not entirely clear how scaled the deployment will be. There are of course interesting promises being made by the OpenRAN community, though few telcos would be prepared to invest comprehensively during these embryonic stages of development.

To understand where OpenRAN might gain the most traction it would probably be best to look at the regions with the lowest ARPU. Turkey is an interesting market, as according to data from Cable.co.uk, the average price of GB on mobile tariffs is as low as $2.25. This is certainly not as low as some other markets, though it starts to get tricky to drive ROI when data tariffs are below global averages.

The promise of OpenRAN is to commoditise the hardware components of the radio access network, which will allow hardware and software to be decoupled. This should, in theory, reduce the cost of radio deployment and remove any vendor lock-in threats which may still persist. This is an attractive idea for companies who need to rebalance the expenditure/profitability equation.

For the moment it is difficult to see what the long-term position of OpenRAN in the vendor mix will actually be. It is not resilient enough a technology just yet for scaled deployments, though some have suggested enthusiasm for trials is a stick to beat traditional vendors down on price.

In the markets where ROI is disastrously difficult to realise, OpenRAN will certainly play a role in the future, as it will probably in rural regions. Though it does remain to be seen how much of a dent OpenRAN will put into the fortunes of the traditional RAN vendors.

FCC orders inventory audits ahead of Chinese purge

The FCC has begun surveying the US telco landscape to understand how deeply embedded Huawei and ZTE equipment is in the nation’s networks ahead of a ‘rip and replace’ project.

Thanks to the National Defense Authorization Act (NDAA), which was signed into law in August 2018, Huawei and ZTE have been banned from any meaningful work in the US. It is not an outright ban, but the wording of the Act has effectively made it impossible for the duo to sell equipment to US telcos. Following the establishment of this Act, the FCC also adopted rules which dictated Universal Service Funds could not be used to fund networks and purchases with equipment from vendors deemed to pose a national security threat.

Now the work has begun to identify and remove the equipment which is already in existing networks. Data must be submitted to the FCC on or before April 22.

“Huawei and ZTE have been initially designated as threats to national security,” said FCC Chairman Ajit Pai. “Given that those designations may become final this spring, we are moving forward quickly to identify where equipment and services from these suppliers are embedded in our communications networks and, where they do have a foothold, to be in a position to help remove them.

“Today we’ve begun to collect the data we will need to protect our networks and protect the American people.”

What should be worth noting it that while exposure to Chinese equipment in the US networks is very low, this is a symbolic gesture emanating from the White House. The US is attempting to eradicate every presence of Huawei and ZTE from the connectivity landscape. It is a political move which makes a point in the conflict between the White House and Beijing, irrelevant if it is likely to cost the US Government millions.

Huawei has been fighting the NDAA and the block of funds for rural service providers who want to use Huawei equipment on the grounds it is an unconstitutional use of power, designed to target a single company which has not been prosecuted in the courts. While a judge in Texas upheld Government actions in recent weeks, Huawei will not be the only company disappointed by the outcome.

The Chinese vendor has continuously argued that it aids smaller telcos across the US and some certainly spoke out in support. MobileNation CEO Michael Beehn said Huawei was the only company cost-effective enough to serve its small footprint of 20,000 customers, while Viaero Wireless CEO Frank DiReco said he had worked with other more expensive vendors in the past, though deployments were never successful.

These are all moot points now however, as the FCC has officially taken the first steps in the quest to purge Chinese equipment every dark and small corner of the US connectivity landscape.

3GPP’s Release 16 timeline hangs in the balance thanks to coronavirus

Much has been made of the impact of the coronavirus outbreak on the telecoms industry, though it now appears the critically important Release 16 timeline could be under threat.

Now the initial shock of the Mobile World Congress cancellation has settled, business is seemingly back to normal, though the coronavirus outbreak has not been contained. The Barcelona trip was cancelled, but so were a horde of other ventures into foreign lands. The 3GPP 5G standards meetings also fell onto the chopping block.

Interestingly enough, Release 16 from the 3GPP, industry specifications to deal with 5G standalone RAN, virtualisation, the 5G core, network slicing and various other topics, could also feel the impact of the virus. The consequence could be further delay on the release of the industry specifications.

“When experiments with e-meetings have happened in the past it is very easy for discussion to spiral and go quite tangential,” one insider told Telecoms.com. “90% of the negotiation to reach agreements on contentious topics happen over coffee, lunch and dinner… you don’t get that opportunity in an e-meeting.”

As a result of the coronavirus outbreak, all Technical Specification Group (TSG) and Working Group (WG) meetings have now been replaced with electronic meetings for the first quarter. 3GPP has said this is only applicable where practical, and when not, presumably the meeting is cancelled.

For Q2, where the meetings were set to take place in China, activities have been cancelled for the moment. Replacement venues are being sought, but it is by no-means a guarantee the outbreak would be contained by this point.

In December 2018, 3GPP already announced a delay to the release of the standards. It might be stubbornly sticking to the existing timelines right now, but if it was not able to stay on schedule in 2018, what chance will it have while the coronavirus outbreak is still at large?

“We are obliged to suspend belief, but I suspect it won’t take much to blow past March plenaries without agreement on some key topics,” our source continued.

“The problem is it will only take one little thing to hold up the whole lot. The release has to be an independently implantable document set. If anything that is mandatory to support is not included, they have to make it optional, remove it completely to the next release or delay. First two options would require a lot of work in themselves.

“e-meetings do not make agreement easy, and it would only take one topic to get political to have someone attempt to throw everything into question as a tactic.”

As it stands, the group is attempting to negotiate the specifications for the RAN aspect of Release 16. The virtualisation components are all largely finalised, while the core aspect is not due until June, when Release 16 would be theoretically frozen. That said, any delay would push these timelines back once again.

According to Dario Talmesio, Principal Analyst & Practice Leader for Omdia, further delay to Release 16 could cascade and possibly have an echo effect throughout the industry. Time to ROI would be increased, which would not be considered welcome news for the financially strained telcos or vendors which have been promised shareholders 5G fortunes.

With RAN being the topic of debate currently, the standards hang in a precarious position. RAN is the aspect of network infrastructure which attracts the most attention because of the scale of deployment. While other standards missions can run in parallel, RAN is critical to product development timelines. Delays here would be heart-breaking for telcos and vendors, but there could also be a knock-on effect for the International Mobile Telecommunications-2020 requirements issued by the ITU.

Although our source was not necessarily the most confident, there are some who are a bit more optimistic.

“The next set of 3GPP meetings have been turned ‘virtual’ and in 3GPP SA2 at least all Release 17 proposals are postponed until the April meeting,” said Alan Carlton, VP of Wireless and Internet Technologies at InterDigital.

“In the upcoming meeting companies will only be allowed to submit corrections to Release 16. This will obviously cause some delays. New ad hoc meetings to catch up will have to be approved and it is not certain all companies will agree to that. Hopefully this is just a blip and thing will get caught-up post this somewhat unusual ‘flu’ season.”

The 3GPP is maintaining an optimistic position on the meetings for the next six weeks and will not make a call on the timelines until TSG Chairs have a chance to discuss progress.

Etisalat goes big on OpenRAN with Parallel Wireless

Operator group Etisalat is trialing OpenRAN tech across its markets in Middle East, Asia and Africa in partnership with ORAN specialist Parallel Wireless.

One of the reasons for this sudden keenness on ORAN, which seeks to unbundle the components and software inside the radio access network with a view to making it cheaper and more flexible, is apparently the concept of ‘All G’. That refers the convergence of all generations of cellular technology onto a single software platform, which would both save cash and simplify network management.

“Today’s announcement is a global achievement setting a technological benchmark across our markets,” said Hatem Bamatraf, CTO of Etisalat International. “This is in line with our long-term strategy and vision of ‘Driving the Digital Future to empower societies’ that has translated to provide the best-in-class customer experience and deliver best value to our shareholders.

The global trials of OpenRAN with Parallel Wireless reiterate Etisalat’s commitment to our vision encouraging us to take the lead in OpenRAN by conducting field trials with various leading technology partners to create an innovative ecosystem in all of our markets. This is also the world’s first ‘All G’ OpenRAN set to provide efficiency and cost benefits for 4G and 5G in addition to setting a roadmap for the next generation of telecom networks.”

This looks like a significant win for Parallel, which is all-in on ORAN. Most of the telecoms industry (bar, maybe, the big RAN vendors) is keen on the concept of commoditising the RAN such that you can pick and choose your components and software. But we still seem to be some way from ORAN being able to support commercial mobile networks, so the key for companies like Parallel is to maintain momentum and interest while the technology evolves.

“As one of the leading communication providers in the emerging markets, Etisalat understands the true potential of greater leverage to their business, in both high end and low-end markets with a greater buying power by shaping the telecom ecosystem and embracing new network architectures, such as OpenRAN,” said Amrit Heer, Sales Director, MENA at Parallel Wireless.

“We are proud to have partnered with Etisalat for these engagements to deliver coverage and capacity without making extensive capital investments associated with legacy network deployments. We are proud to have been selected to support Etisalat in reimagining wireless infrastructure to be much lower cost ensuring access to innovative digital services in the region.”

ORAN is one to keep an eye on in the coming months and years. It represents a significant threat to the business models of the big RAN vendors, who sell ‘closed’ RAN solutions that require you to go all-in with them. At the very least the prospect of ORAN is a useful stick for operators to beat their vendor partners down on price with and we had expected it to be a major talking point at MWC 2020.

Three UK in a spot of bother as senior execs head for the exit

With Three’s big bet on Huawei proving to be somewhat of a disaster, two senior technologists are heading towards the exit.

Many have focused on the difficulties faced by BT in light of Huawei’s limited role in the 5G future of the UK, but Three is potentially facing the biggest headache of all. And just as the team begins to pick up the scraps of a decimated deployment strategy, two of its most senior technologists have exited the business.

Phil Sheppard, who was for all intents and purposes the telco’s CTO, and Graham Marsh, the former-Director of Core Technology, have almost 30 years of Three experience between them. Now neither is working at the telco, and despite these two most likely having a significant input into the headache that is the current rollout plan, this is a company which probably needs as much experience in the ranks as possible.

While there will be conspiracy theorists who link these exits with the Huawei decision, this might be somewhat of a dubious link. Graham Marsh has already started his new role, founder at Infinite Potential, while Sheppard’s exit is less than a week after the Supply Chain Review announcement. There might well be a link, but this would be an incredibly cut-throat decision. Sheppard has said on LinkedIn he will be doing consultancy work in the immediate future, as well as taking a few holidays.

Irrelevant as to the background, Three could really use with this experience in the room not working for someone else.

The sticky situation which Three is currently in should not be taken too lightly. Three went big and bold with its 5G deployment plan, deciding to swap out Samsung 4G RAN to ensure backwards compatibility with its sole 5G RAN supplier Huawei. This strategy could have been a game-changer for the city-centric telco, but now it looks like a complete disaster.

The conclusion of the Supply Chain Review last week have certainly been met with mixed reviews. For some, at least there is a decision, a foundation of certainty which can be built on over the coming years as the industry hurtles towards the 5G era. But for others, the 35% network share restrictions on ‘high-risk vendors’ is either too extreme or not extreme enough. There isn’t a huge amount of consensus when it comes to the position on Huawei.

There are now two restrictions which the telcos will have to bear in mind. Firstly, equipment from ‘high-risk vendors’ cannot make up more than 35% of the radio inventory across the network. Secondly, no more than 35% of the total internet traffic across the year can pass through equipment from ‘high-risk vendors’. For a telcos who’s sole 5G RAN supplier is now deemed a ‘high-risk vendor’, this is a monumental migraine.

During its earning call last week, BT outlined the financial impact of the Supply Chain Review decision; £500 million. Part of this will be redefining its deployment strategy, while it will perhaps have to undertake a ‘rip and replace’ project to ensure there is interoperability between 4G and 5G RAN equipment. Three is yet to put a figure on the Huawei conundrum, but the impact here will be much more than financial.

Firstly, you have to consider the ‘rip and replace’ project it has been undertaking for the last six months in an effort to replace Samsung with Huawei as a sole supplier. Some of this work can be left alone, it has a 35% window to work with after all, but depending on progress, some of this work might have to be undone to ensure new supplier equipment performs to the levels desired.

Secondly, there is a major timing penalty placed on Three.

Picking a supplier in the telco industry does not happen overnight. There are numerous bureaucratic hurdles to jump over, commercial negotiations to take place, and trials which need to be navigated. It isn’t as simple as replacing Huawei with Ericsson, let’s say, this is incredibly time intensive.

Three is in a difficult position, and more often than not, whenever this is the case the people who have ‘been there, done that’ are some of the most valuable in the room. Unfortunately for Three, two of its most senior technologists are seeking pastures new.

Some have suggested the exit’s might be linked to the Huawei decision. There might be an element to this, but we suspect it is more a case of coincidence and bad timing. Very bad timing as it works out.

NB: On a personal note, best of luck to Phil. Having interviewed him a few times on camera and events, Phil is a lovely man with a wealth of experience. Whoever hires him next has found themselves an excellent employee!

Supply Chain Review offers clarity and new headaches for MNOs

Any decision is better than the purgatory of uncertainty which the telcos have been sitting in for months, but the Supply Chain Review offers a whole new wave of headaches.

There are still grey areas to consider, but the Department of Digital, Culture, Media and Sport (DCMS) has offered a foundation for telcos to build on. Some might be slightly disappointed by the decision, certainly some more than others, but any decision was better than playing the waiting game; action can now be taken.

Huawei’s contributions to a UK MNOs 5G radio inventory can not exceed a 35% share. However, another interesting element to consider is that Huawei radio equipment cannot carry more than 35% of internet traffic either. This presents new questions as to how networks are built. Huawei technology might not be able to be clustered in certain urbanised areas, which has been the trend in the past.

But new questions are arising for each of the players in the market.

Is Huawei to lose leadership position in the UK market?

Speaking during a call to the press, Huawei VP Jeremy Thompson said capturing 35% market share in any nation would be a job well done for Huawei, though this is assuming customer relationships are rebalanced.

For Huawei to capture 35% market share, it would have to be a major supplier to all the UK MNOs and for all the MNOs to use every inch of the 35% network share. This is a situation which is very unlikely to happen.

EE and Vodafone are over the 35% limit for Huawei equipment in their 4G networks, therefore these relationships will have to be structured down. Three named Huawei as its sole 5G RAN supplier, Samsung provided 4G RAN equipment, therefore it will definitely lose business here as well. There is room for growth at O2, but this is a telco it has not had notable success in recent years.

Huawei’s RAN equipment makes up less than 1% of O2 radio inventory, only present due to trials, and this is unlikely to change.

As Thompson pointed out, Huawei’s market share in the UK when the Supply Chain Review was initially launched was 35%. Its business with its three main customers will have to decrease for them to meet the targets in three years, and it is unlikely to increase its commercial activity with O2.

Huawei could very feasibly lose its RAN leadership position due to bureaucracy as opposed to head-to-head competition.

Three has the biggest headache of all

Three is not in a healthy position but fortunately its 5G deployment is not that advanced.

“We note the government’s announcement and are reviewing the detail,” said Three UK CEO Dave Dyson.

Last year, Three began stripping Samsung 4G equipment out of its network to ensure interoperability with its sole 5G RAN supplier, Huawei. Fortunately, Three has not been accelerating its deployment plans as quickly as EE or Vodafone, therefore does not have as much work to undo. Three will not have to start again from the beginning, but it will have to redevelop the strategy.

As a city-centric telco, the Huawei decision made sense as the Chinese vendor arguably has the best equipment for the situation. Investing so significantly in Huawei might have been a bold decision two years ago, but it is now looking like nothing short of a disaster.

Business as usual for O2

“Huawei kit makes up less than 1% of our owned network infrastructure,” said an O2 spokesperson. “We will continue to develop our 5G network with minimum disruption with our primary vendors Nokia and Ericsson.

“Whilst we agree with the government that diversity of supply is the best way to serve customers, careful consideration must be given to the distinction between ‘core’ and ‘non-core’ as 5G networks develop and evolve. We’ll now take time to review the full report.”

There are roughly a dozen Huawei radios in the O2 network, a legacy of trials during yesteryear prior to supplier decisions being made. O2 has said it will work exclusively with Ericsson and Nokia in the past, painting a gloomy picture for Huawei, though there is always room for change.

Earlier this month, O2 announced it would be aiming to integrate OpenRAN alternatives into some areas of the network. This was slightly unexpected news and would have altered deployment plans in pursuit of commercial efficiencies. This demonstrates that the plans are not 100% set in stone.

Huawei’s commercial relationship with O2 can only get better, and if it does want to maintain its RAN leadership position in the UK, it will have to figure out how to break into this business. Ultimately, very little changes for O2 unless it wants to change itself.

EE and Vodafone have some thinking to do

“While Vodafone UK does not use Huawei in its core – the intelligent part of the network – it will now analyse the potential impact of today’s decision on the non-core elements of its network (masts and transmission links),” a Vodafone statement reads.

“Vodafone UK uses a mix of Huawei, Ericsson and Nokia equipment for its 4G and 5G masts, and we continue to believe that the use of a wide range of equipment vendors is the best way to safeguard the delivery of services to all mobile customers.”

For its 4G network, Ericsson supplies 50% of the radio inventory, Nokia 12% and Huawei 38%. Vodafone CTO Scott Petty has previously suggested plans to phase out Nokia, though that position might have to be reconsidered. Vodafone will have to scale down its Huawei relationship moving forward into 5G and find a suitable replacement.

Interestingly enough, Vodafone has also launched its own OpenRAN initiative, though whether this technology is resilient for a straight swap remains to be seen. It will at some point, but Vodafone will not want to wait until that point.

EE is in a similar position.

“This decision is an important clarification for the industry,” said a spokesperson from EE parent company BT.

“The security of our networks is an absolute priority for BT, and we already have a long-standing principle not to use Huawei in our core networks. While we have prepared for a range of scenarios, we need to further analyse the details and implications of this decision before taking a view of potential costs and impacts.”

EE currently works with Huawei and Nokia. The share of Huawei radio inventory exceeds the 35% limit, though it has time and options to renegotiate over the next three years. It is a bit of a headache for the team, but not the end of the world.

The difficulty which EE faces is the current structure of the network. Huawei provides the radio equipment for the urbanised areas, while Nokia is focused on rural. The internet traffic crossing Huawei radios on EE’s network will dramatically exceed the 35% restriction.

Are Nokia and Ericsson in a stronger negotiating position?

For cut-throat sales opportunists, this is a very interesting position for Ericsson and Nokia. Unless OpenRAN makes significant progress in the short-term future, or Samsung starts swinging punches, 65% network share is effectively a straight shootout between the two.

As Heavy Reading Analyst Gabriel Brown has pointed out, the limits are only directed towards 5G access and is therefore more manageable, but the knowledge of restrictions will always be in the mind of some salespeople; this adds weight to the vendor negotiating position.

Ericsson and Nokia will of course never acknowledge this position, but these are commercial organisations who have seen profits eroded over the last few years. And the guys sitting at the negotiating table are salespeople who like getting big bonus checks.

Could this be the catalyst for OpenRAN and Samsung?

When there are challenges for some, opportunities will always be presented for others. Ericsson and Nokia are certainly set to prosper thanks to Huawei limitations, though the same could be said for the OpenRAN ecosystem and Samsung.

OpenRAN has been touted by US politicians as a potential alternative to Huawei equipment, Senator Mark Warner is proposing a $1 billion fund for the ecosystem, though needs might accelerate demand.

With Huawei’s RAN equipment under restriction, there is certainly a dent in the competitive landscape. It could have been a lot worse, but it will have an impact. The question is how much enthusiasm will be placed in the OpenRAN movement to compensate and create the competitive environment so many are hoping will emerge.

Vodafone and O2 have already dipped their toes into the OpenRAN waters, with commercial deployments to accelerate over the next 2-3 years, though the Huawei saga could make this seem like an attractive alternative to more. The UK Government has seemingly not banned Huawei completely for competition fears, therefore it might be tempted to invest in some developing ecosystems, as would EE and Three.

Samsung is a different story.

This is a vendor which has credibility in the RAN market but has never made a significant impact on the UK telco industry. It did have a healthy relationship with Three prior to the Huawei shift, but activities otherwise have been limited in this segment. Huawei limitations could present an opportunity.

At Three, it would make sense to head back to tried-and-tested waters, while other telcos might consider the Korean vendor to ensure increased diversity in the supply chain. If reliance and variety is the goal, few would want to put more eggs in the Ericsson or Nokia baskets.

With relationships in Korea with KT and SK Telecom, as well as Verizon in the US, Samsung has credibility. The Huawei woes might just be enough to tip the scale in this vendors favour, if it start to throw the right punches.

End of the UK road for ZTE?

The 35% limit is not a restriction for a single supplier, but for any suppliers who are deemed ‘high-risk’. Huawei and ZTE both fall into this bracket therefore it is likely to present a question to the telcos; do we work with Huawei or ZTE? There is room for a slice for each, but this is highly unlikely to happen, especially since the review concludes there is no way to mitigate the risk posed by ZTE.

When it comes to the global market share of RAN, ZTE is a company which falls into the ‘also ran’ category. It has experienced success in Africa and Asia, and of course in China, but exposure in Western Europe has been incredibly limited. In the UK, there is very little evidence of success, though Jersey Telecom named the vendor as its sole 5G RAN supplier.

Jersey Telecom will have to have a complete rethink of its strategy, like Three, but the writing seems to be on the wall for ZTE. This could be the end of the vendor as a player in the UK market.

1&1 Drillisch trials with ZTE seemingly up-and-running

ZTE might not get much media attention nowadays, though some might think of this as a blessing, but it seems to be getting along just fine with Germany’s newest telco, 1&1 Drillisch.

With reports being traced back to a YouTuber named Tobias Dirking, 1&1 Drillisch is seemingly trialling 5G technology with the lesser criticised but arguably more controversial Chinese vendor ZTE. While this is only a trial for the moment, ZTE equipment has been spotted on the roof of the telcos offices in Karlsruhe and Montabaur.

According to Dirking’s video, the network technology has been supplied by ZTE, while the 4×4 MiMo antenna is from CommScope. No LED lights can have seen flickering from the equipment, so it would be fair to assume it is not yet switched on.

1&1 Drillisch has said this is not an indication of a decision for its 5G suppliers, but it is working to trial all available options.

While ZTE is a well-known name in the industry, success in the European markets has been relatively low-key. The firm has a relationship with Wind Tre in Italy, as well as several smaller telcos such as JT in Jersey, though it has not experienced the triumph of its domestic rival Huawei.

Interestingly enough, if the more successful ZTE becomes in the European market, the more enflamed the relationship between European nations and the US might become. If the White House is enraged by tenuous claims of a link between Huawei and the Chinese Government, Senators are now calling it the ‘intelligence-gathering arm of the Chinese Communist Party’, it is hardly going to be enthralled by a state-owned entity supplying RAN equipment.

After being founded in 1985 as the Zhongxing Semiconductor Company, the firm now describes itself as ‘state-owned and private-run’. Xi’an Microelectronics and Aerospace Guangyu are two of the largest shareholders of the business, controlling five of the nine board seats, and are subsidiaries of state-owned organisations in China. This is a much more obvious link than what has been suggested between Huawei and the Chinese Government.

ZTE has largely escaped the spotlight in recent months, perhaps due to the fact it does not dine at the top table like its domestic rival Huawei does. The ZTE business sees greatest success in Asia and Africa, though if it does start to gain traction in Europe, we can imagine White House aggression would be expanded.

What is worth noting is this is simply one of a seemingly endless list of unknowns at 1&1 Drillisch. Right at the top said list is the launch date, but before that can be established, the telco needs to sort out its spectrum portfolio.

Having acquired two blocks of 10 MHz in the 2 GHz band and five blocks of 10 MHz in 3.6 GHz during the spectrum auction last June, 1&1 Drillisch has also confirmed it has entered a relationship with Telefonica to lease two separate frequency blocks of 10 MHz in the 2.6 GHz band. This lease will run until 31 December 2025, though the remaining unknown is for the lower frequency spectrum.

Although the spectrum which has been collected is attractive for 5G services, there is still a requirement for the low-band spectrum, more suitable for coverage and propagation. 1&1 Drillisch is drawing a blank for these valuable assets, so will have to enter into a national roaming agreement with one or more of its rivals. This is far from ideal and will have to be sorted before any commercial services can be launched.

1&1 Drillisch is a very interesting company to keep an eye on, primarily because of the regulatory leg-up it has been offered by Germany, but its choices on the supplier side could cause some ripples in the political arena.