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Vodafone is looking to cut UK network costs with OpenRAN equipment

Vodafone Group launched tests of OpenRAN networking equipment at 120 rural sites in the UK as well as in Mozambique and the Democratic Republic of Congo. CEO Nick Read said the company plans to “fast track” the technology into Europe, having found success operating connectivity services in Turkey using OpenRAN technology and conducting OpenRAN trials in South Africa. Vodafone's European Capital Expenditure

Technology built on the OpenRAN standard — set by the O-RAN Alliance — is interoperable, standardized hardware and software-defined networking technology that enables a network operator to use equipment or software from more than one provider. 

OpenRAN equipment enables telecoms like Vodafone to access a wider pool of equipment than what may be available through a single provider. Traditionally, networking equipment from different suppliers hasn’t interoperated well, forcing telecoms to pick one main supplier. For instance, UK mobile carrier Three UK is replacing its Samsung-based 4G network with dual 4G and 5G equipment from Huawei, and in July 2018, T-Mobile signed a $3.5 billion 5G equipment deal with Nokia.

OpenRAN enables telecoms to mix and match equipment to build the best network for a given location. For example, networking equipment from one provider might be well-suited for an area with a high density of connections, while equipment from another may provide better connectivity in an area where connections are thinly spread.

Other telecoms can embrace OpenRAN equipment to gain better leverage against their equipment providers. Telecoms could follow the example of Japanese telecom NTT Docomo, which launched its initial 5G network in September 2019 using OpenRAN equipment from multiple providers. With OpenRAN, telecoms can add new equipment suppliers to their list of vendors to boost competition, pushing down equipment prices in turn.

This could be an attractive option for telecoms that are spending billions on networking equipment as they race to build out 5G networks — telecoms in Asia are expected to spend $370 billion on building out new 5G networks between 2018 and 2025, according to the GSMA. Still, a telecom considering this approach must do so carefully: While OpenRAN tech can reduce network costs, it can also lead to logistical headaches and require telecoms to rework their systems to handle multiple technologies. 

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