US-Taiwan Major League Netcom Starting Lineup

Under the strong sanctions by the United States, Huawei, whose products are disconnected, will be forced to withdraw from the global 5G base station market, and global telecom companies that lack cheap equipment are available. In order to balance the cost structure of base station deployment, it has actively evaluated the use of traditional base station equipment with Open The RAN (Open Virtualized Radio Access Network) solution is expected to accelerate the increase in the penetration rate of Open RAN in the 5G network, and bring fresh water for the growth of the Taiwan Netcom plant.

In order to accelerate the deployment of 5G, the US government is increasingly interested in Open RAN and virtualized network technologies as an option to replace China’s Huawei products.

On November 20, the House of Representatives passed the Utilization of Strategic Alliance (U.S.) Telecommunications Act of 2020, which will be provided through the National Telecommunications and Information Administration (NTIA). A US$500 million grant to support the deployment and use of Open RAN across the United States, promote the use of technologies including software, hardware, and micro-processing technologies, to enhance the competitiveness of the Open RAN network supply chain, and to promote open networks Use of road equipment.

The bill still needs to be approved by the Senate, but according to the consensus of the two parties in the House of Representatives, this is an imperative new direction for the development of the US industry. For the network supply chain that develops and sells Open RAN equipment, it can be It’s a big plus. With the support of the US policy, it will be able to compete with existing telecom equipment vendors for business opportunities in the US 5G deployment.

Closed to open, the monopoly of equipment manufacturers has become an absolute success

The Open RAN Alliance was established in February 2018 by AT&T (U.S.), Verizon (U.S.), KDDI (Japan), China Mobile (China) and other vendors. Up to now, 26 telecom operators worldwide have joined , More than a hundred equipment vendors and research units participated in the research, aiming at open and interoperable interfaces, and at the same time introducing machine learning and AI real-time analysis.

Telecom companies used to purchase equipment from major telecom equipment manufacturers such as Ericsson, Nokia, Huawei and ZTE, and due to the incompatibility of equipment from different manufacturers, they needed to purchase overall solutions, such as base stations, core networks, and radio frequencies. , Which is a closed architecture model, leading to an oligopoly of telecom equipment vendors in the mobile communication technology market.

Carriers that import Open RAN will have more choices for equipment suppliers. They can skip traditional telecommunications equipment vendors and purchase equipment directly from hardware equipment factories for integration. At this time, Cisco, Mavenir and Samsung, which have the ability to integrate heterogeneous brands And other system integration plants play an important role. In the future, equipment prices may be affected by market competition and lower prices. It will no longer be monopolized by a very small number of telecommunications equipment manufacturers in the past. There will be more freedom in subsequent equipment replacement or maintenance, which will greatly reduce the cost pressure of telecommunications companies or operators.

5G deployment cost is 80% less

Although the US AT&T and international telecommunications companies have previously stated that they will add the Open RAN design to the 5G mobile communication infrastructure, but the actual proposal to introduce the schedule or purchase related white-label equipment and other specific actions has not been seen. The main reason is that telecom companies are still evaluating how to balance the purchase of traditional telecom equipment and the purchase of new Open RAN equipment. On the one hand, it hopes to reduce the cost of 5G infrastructure construction through the introduction of Open RAN and achieve the goal of accelerating the popularization of 5G. On the other hand, it hopes to bargain prices from traditional telecommunications equipment manufacturers.

The world’s first telecom company to deploy 5G networks using Open RAN is Japan’s Lotte Telecom. As it is a latecomer to 4G mobile communications, it does not have the depreciation burden of large-scale base station equipment investment in the past 3G and 4G eras, and is relatively willing to invest New technology, the first to use Open RAN in 2019.

Its 4G network construction cost is about 50% of the traditional method. After replacing the access antenna module, the access network and core network can be software-upgraded to a 5G network. The cost of the constructed 5G network is more than that of traditional methods. ○~80%, and the tariffs provided to consumers are more competitive.

Rakuten Telecom’s Open RAN uses Cisco’s system integration. The edge computing server supply chain provider is Quanta’s subsidiary Wanda, the 5G small cell provider is Zhonglei (5388) and the software provider is Altiostar. Rakuten Telecom also plans to sell its network platform service plan to Japan and the world, and conduct a proof of concept (PoC) in the third quarter of this year.