You would think that mobile operators are struggling for lack of technology or standards, but in fact, they are struggling because the comfortable model of sourcing a whole RAN from one vendor is being upended by a new approach: Open RAN.
For decades, carriers relied on a few big suppliers (think Ericsson, Nokia, Huawei) to provide end-to-end radio access networks. In theory, this ensured reliability and simplicity, one point of failure to address if something went wrong. In reality, this single-vendor Radio Access Network (RAN) model has become a single point of stagnation. Every time a new feature is needed or a better price is sought, operators find themselves locked into proprietary solutions. The result is slower innovation, higher costs, and fewer choices. No wonder the industry’s rallying cry has become “open up the RAN” – hoping that more openness will eventually lead to telco wallets being opened up in the form of savings and new revenue.
This article examines what Open RAN actually means, how the disaggregation of the RAN helps operators through increased flexibility and competition, and introduces new challenges and drawbacks. It also explores how telecom companies should adapt to make the most of the future.
What Is Open RAN? A Brief Primer
At its core, Open RAN is about opening up the traditionally closed architecture of cellular networks. In a conventional RAN, the radios, hardware, and control software all come as a package from one vendor and are tightly integrated. By contrast, Open RAN is a set of standards that “open” the interfaces and protocols between the RAN’s subcomponents – radios, baseband units, and software – allowing equipment from different manufacturers to interoperate. In practice, this means the RAN gets broken into modular pieces: the Radio Unit by the cell tower, the Distributed Unit for signal processing, and the Centralized Unit that manages multiple sites. These can now mix and match from different vendors as long as they adhere to the open interface specs. The goal is a multi-vendor RAN ecosystem where, for example, one company’s radios can work with another’s baseband software, much like how a Dell PC can run Microsoft or Linux software.
This disaggregation is often coupled with virtualization. Many Open RAN deployments utilize software-defined, cloud-based implementations (vRAN), which run network functions on common, off-the-shelf servers rather than specialized telecom hardware. The vision is that by decoupling hardware from software and utilizing open interfaces, operators gain flexibility and scalability: they can avoid vendor lock-in, introduce new features more quickly, and potentially reduce costs. An industry alliance, the O-RAN Alliance (founded in 2018), has been driving these standards, hosting plugfests, and crafting specifications to ensure that all these pieces can communicate smoothly with each other in real-world networks.
Where Disaggregation Helps (The Promises of Open RAN)
Proponents of Open RAN have been touting a range of benefits. The first and most obvious is vendor diversity and competition. Instead of being stuck with whichever price and innovation cycle your single vendor offers, you can mix multiple suppliers – perhaps radios from Company A, software from Company B. In theory, this competition drives down costs and spurs innovation. Indeed, having a choice of vendors for each RAN component “opens the RAN market to competition, fostering innovation and – theoretically – driving down cost” for operators.
Another major promise is cost efficiency. If done right, Open RAN lets operators use commoditized hardware and avoid the vendor “lock-in tax.” Instead of expensive proprietary baseband units, they can deploy standardized servers and pick software that competes on price-performance. According to a recent industry update, “Open RAN creates a cost structure that is lower than traditional network architectures, because operators can purchase commercial off-the-shelf servers instead of purpose-built hardware”. Real-world evidence is starting to back this. Japan’s Rakuten Mobile built a greenfield 4G/5G network entirely with open, virtualized RAN. The result? Analysts found that Rakuten achieved an advantage of around 40% lower CapEx and 30% lower OpEx per site compared to incumbents’ networks. Likewise, Dish Network, which is building a 5G network from scratch in the U.S., has said that Open RAN enables it to offer services at lower prices than competitors, thanks to the efficiency of running everything via software on the cloud.
Beyond cost-cutting, innovation and agility are key benefits. By opening interfaces, operators can invite third parties to develop new applications for the RAN. A centerpiece of Open RAN architecture is the RAN Intelligent Controller (RIC), which serves as a platform for network applications. Using this tool, telcos can plug in modular programs (dubbed xApps and rApps) to optimize the network on the fly or offer new services. This has significant implications: Vodafone was able to double the capacity at a busy 5G cell site by deploying a RIC application, a much more cost-effective way to increase capacity than a traditional hardware upgrade. In other words, openness enables software-driven innovation.
Perhaps the most human benefit of disaggregation is the freedom and control it affords. This freedom to pick the best-of-breed component for each need is empowering. It can also improve security and resilience – if one vendor has a vulnerability or flaw, you can swap them out or use others as backup (and, as some point out, a diverse multi-vendor network might avoid the “single point of failure” risk of putting all your eggs in one vendor’s basket).
Where Disaggregation Hurts (The Pitfalls and Challenges)
For all its promise, Open RAN also comes with significant downsides – ones that telecom veterans are quick to point out. The biggest is integration complexity. Running a multi-vendor network is hard. In a traditional RAN, if something breaks, you call your one vendor and they fix it (or take the blame). In an Open RAN, if the radio is from Vendor A, the software is from Vendor B, and the server is from Vendor C, who ensures that it all works seamlessly? The operator (or a systems integrator) shoulders that responsibility. This means higher upfront effort in testing and integration, and potential finger-pointing when things go wrong. Indeed, early adopters have reported that getting everything to work together is a non-trivial challenge. Dish executives, while upbeat about the cost benefits, admitted that managing a mélange of vendors was “a challenge” that required advanced automation tools to handle. Many operators without deep IT/cloud expertise are understandably wary of this – they’re cellular engineers, not software integrators, and now they’re being asked to assemble a network like a complex puzzle.
Performance and maturity questions are another sore point. Critics (often the incumbent vendors) have argued that open, virtualized RAN can’t yet match the performance of traditional gear. There is some truth here. In the early days, off-the-shelf hardware running baseband functions in software was less efficient, leading to higher power consumption and sometimes lower reliability. Ericsson’s CEO claimed back in 2021 that Open RAN would be more expensive than traditional RAN and deliver worse performance. Essentially, he warned that any cost savings might be eaten up by the need for more servers and power to do the same job. While Open RAN tech is improving (with accelerators and optimized software to close the gap), many operators still worry that a multi-vendor 5G might drop calls or have coverage holes that a single-vendor network wouldn’t. There’s also the matter of support and accountability. If, say, a base station malfunctions in a multi-vendor setup, troubleshooting can become a he-said-she-said affair: the radio vendor might blame the software vendor, who blames the server vendor, and so on. This “not our fault” loop can mean longer downtimes unless the operator has the expertise to pinpoint issues internally.
Then there’s the slow pace of adoption and mixed results to date, which temper the hype. Despite years of evangelizing, Open RAN has seen only limited deployment in existing (“brownfield”) networks so far. A report from Dell’Oro Group noted that, after experiencing some early growth, Open RAN revenues actually declined by about 30% year-over-year by late 2022.
Finally, there are organizational and cultural hurdles. Telco procurement and ops teams are used to dealing with a handful of familiar vendors. Moving to Open RAN requires new skills (cloud software, DevOps, integration testing) and new ways of working with a larger ecosystem of partners. It’s not just a technology shift, but a mindset shift – and as any telecom executive will tell you, those can be the hardest changes of all.
How Telcos Should Adapt
Shifting to a disaggregated RAN model is a journey that involves technical, operational, and cultural adaptation. Here’s how telecom operators can navigate the transition:
Start small, learn, and scale: Rather than ripping out your entire RAN, identify pockets where Open RAN can be trialed with low risk. This might be rural sites, indoor networks, or new coverage areas. By starting with “baby steps” – as many are doing by deploying in a few select locations – your engineers can climb the learning curve without jeopardizing the whole network.
Invest in integration and automation: Embracing Open RAN means, to some extent, becoming your own integrator. Operators should enhance their in-house systems integration capabilities or partner with firms that specialize in this area. Tools and automation are your friends here.
Upskill your workforce: Running a disaggregated, cloudified RAN requires new skills. Telcos should train existing network engineers in cloud computing, software troubleshooting, and DevOps practices. At the same time, bring in fresh talent from IT and cloud domains who naturally grok automation and software-centric operations.
Demand openness and collaborate on standards: Operators collectively hold a lot of power – use it. Continue to push incumbent vendors to support open interfaces (many are now “O-RAN compliant” in some aspects under operator pressure). Participate actively in bodies like the O-RAN Alliance and Telecom Infra Project. This collaboration also gives you early insight into what’s maturing and what’s not – invaluable for timing your deployments.
Have realistic expectations (and patience): Despite the marketing slogans, Open RAN is not a magic wand for instant savings or 5G monetization. It may take years to realize the full financial benefits, as Rakuten’s experience shows (they achieved cost savings per site, yet profitability remains a challenge). Internally, set balanced KPIs for your Open RAN projects that include not just cost reduction, but network performance and reliability benchmarks.
Mix and match strategically: Full disaggregation doesn’t have to be the goal on Day 1. Some operators choose a middle path – for example, opening interfaces to third-party apps while still purchasing radio units and basebands largely from a single trusted vendor. This can deliver some benefits (such as Vodafone using a RIC to boost capacity) without immediately addressing multi-vendor integration at every layer.
Lead the Change, Reap the Rewards
It’s easy for a telecom operator to assume that sticking with the status quo – a single vendor RAN – is the safe and optimal route. After all, if your network is up and running with one vendor’s kit, you might not hear alarms ringing. But if you’re not actively exploring ways to open up and modernize that network, chances are you have blind spots that are quietly costing you.
The encouraging news is that moving toward a more open RAN unlocks far more than it disrupts. The potential payoff for evolving your RAN strategy is transformative. By embracing disaggregation where it makes sense, you essentially future-proof your network architecture. You inject a new agility into your organization: the ability to swap out a piece of technology without rebuilding everything, the ability to scale capacity or deploy new services on demand via software. You foster a culture of innovation because your teams and partners can trial new ideas (like AI-driven network optimizations) quickly on an open platform. You can even gain leverage in vendor negotiations – when vendors know you could replace their component with a competitor’s, they’re far more motivated to offer their best prices and support.
In concrete terms, an open RAN approach can lead to speed and adaptability that traditional setups struggle to match.
None of this is to say the journey is easy. However, as the telecom industry has learned, time and again, clinging to closed, proprietary systems in a fast-changing world is a recipe for obsolescence.
