If you were to poke around Deutsche Telekom’s radio access network (RAN) in Germany for new equipment supplied by Finland’s Nokia or Japan’s Fujitsu, you’d need a very large magnifying glass and a lot of time. Both companies were named in a recent blog by the German telecom incumbent who dismisses recent criticism from the European Union over its risky 5G reliance on Huawei, a controversial Chinese supplier. We have alternatives, the operator seems to say. Yet Nokia and Fujitsu are barely visible outside of the trials.
Both have leaned towards a new concept called open RAN which Deutsche Telekom and other European telecommunications companies have championed. With it, supplier interoperability would be ensured, allowing an operator to combine suppliers into one site where they would previously have purchased all products from one company’s system. If it works, it could prop up specialists and generate sustainable alternatives to today’s big kit sellers.
Deutsche Telekom CEO Timotheus Httges (left) recently photographed together with other company executives.
(Source: Deutsche Telekom)
But in a recently published white paper in February, Deutsche Telekom acknowledged that the open RAN is not ready for “immediate large-scale deployment” and won’t be any time soon. One of the big issues to emerge recently is the inadequacy of today’s 7.2x open fronthaul specification for massive MIMO, an antenna-rich 5G technology that is becoming mainstream and showing up in many telecommunications RFPs (requests for proposal).
A change approved by the O-RAN Alliance, the telecommunications-led group that deals with the specifications, would remove some functionality from the distributed unit (DU), a server box that performs the calculation of the RAN, and put them back into the radio unit (RU ). But experts say this could add complexity, hinder progress and make it more difficult to secure openness. If telecom companies resort to purchasing DU and RU from the same supplier, the open RAN will have failed.
Blurred lines
Meanwhile, Deutsche Telekom has built a vast 5G network covering about 95% of the German population, it says using traditional technology. And Huawei figures prominently, accounting for nearly 60 percent of the 5G RAN equipment deployed so far, according to data from Strand Consult, a Danish firm. The only other major supplier of RAN is not Fujitsu or Nokia, but Sweden’s Ericsson, which supplies old-fashioned equipment.
Deutsche Telekom seems to think it has done enough by removing Huawei from its core, the sensitive network control center, where a dishonest supplier could wreak havoc. The RAN, by contrast, “is rated less critical and lower priority in terms of security,” reads his blog. “The same goes for the transportation and aggregation network.”
Yet Ericsson disagrees. In a white paper published about three years ago, the Swedish company said that “RAN and core are both critical components of 5G networks because gNBs (5G base stations) break the encryption of user data.” He also said that the lines separating the core from the RAN are blurring, in part due to the open work of the RAN which Deutsche Telekom supports. “This development allows for even more ways to deploy RAN functionality, and thus further blurs the distinction between RAN and core from a security perspective.”
Deutsche Telekom defends its use of Huawei on shaky grounds. Big vendors have been pushing single RAN (or S-RAN) products that can theoretically support multiple generations of 2G to 5G on the same antenna, he points out. To replace Huawei in 5G, it would also have to replace it in all “predecessor” technologies. “As a result, a change of manufacturer becomes time-consuming and expensive,” he says.
But it did exactly that in the 4G days, when it switched from Nokia to Ericsson through the non-Huawei part of its network. That decision was not driven by security concerns but by technical and commercial factors. Nokia subsequently got off to a bad start in 5G, falling behind Ericsson and Huawei on product competitiveness. Since then, however, it has seemed to resurface. If the open RAN isn’t ready, EU authorities might be interested to know why Deutsche Telekom couldn’t reintroduce Nokia by supplying classic RAN products at Huawei’s expense.
Barclays estimates the cost of replacing Huawei equipment at around 1.1 billion ($1.2 billion) for Deutsche Telekom, which has given no indication of how much it thinks it should spend other than saying an exchange would be “expensive”. But $1.1 billion would equate to less than 1% of Deutsche Telekom’s revenues last year and only 14% of its net profit. Compared to most other telecom incumbents in Europe, it is in good health thanks, in large part, to its ownership of T-Mobile US outside of Europe which increased sales last year by 6% and the its operating margin of 1.8 percentage points, to 13.5%.
Grumble about the EC
Deutsche Telekom is clearly unhappy with the European Commission (EC), which grumbles in its blog about the EC’s lack of interest in the open RAN, among other things. But others will ask why governments should be involved at this micro level in technology architecture. The US government has been more supportive, says Deutsche Telekom. But that’s largely because the US sees the open RAN as a potential alternative to Huawei and a boost for US business interests, not because it thinks the open RAN is better than the classic RAN.
Funding for open RAN companies has flowed in from US tech giants, including Intel and Cisco, both of which could profit if open RAN takes off. Intel, in particular, would benefit from open RAN virtualization as the world’s leading supplier of general-purpose processors used in these new-look networks. However, despite having its own venture capital arm, Deutsche Telekom has not provided any serious backing to open RAN startups.
In 2021, Deutsche Telekom signed a white paper identifying Poland’s IS-Wireless as the only small European company with a complete portfolio of RAN software. Yet Slawomir Pietrzyk, its CEO, told Light Reading this week that his company has since struggled to raise outside finance, instead relying on sales growth to underpin development. Deutsche Telekom seems unprepared to put its money where its mouth is.
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Iain Morris, international editor, light reading
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