Japan’s Rakuten is the first global mobile network operators (MNO) to fully virtualize their networks, with millions of active customers on commercial service. Rakuten has taken their expertise of being a fully virtualized operator to create the Rakuten Communications Platform (RCP), which packages its vendor portfolio and deployment expertise and markets it to other operators who also want to run their network in the cloud. Interestingly, the vendor product portfolio that is being sold is more extensive than what Rakuten has chosen to deploy. Based on news reports, Rakuten has already signed up 15 customers on RCP. The first publicly announced RCP trial partner is Ligado. A would-be US operator, Ligado owns spectrum in the United States that was previously used for satellite use. Up until recently Ligado has been involved in a fight with the Department of Defense over potential interference with GPS and NTIA, but the FCC sided with Ligado and allowed them to use their spectrum for commercial use.
Based on our research, the RCP universe consists of the following players:
|Converged 4G/5G Core||NEC|
|Service orchestration||Innoeye (acquired by Rakuten)|
|Open RAN software||Altiostar|
|4G Sub-6 GHz Radios||Nokia|
|5G Sub-6 GHz Radios||NEC|
|4G/5G Sub-6 GHz mmWave Radios and Software||Airspan|
Qualcomm and Intel are also mentioned as RCP participants but apparently are mostly involved as silicon providers for their particular area of expertise.
Rakuten continues to use Innoeye and Altiostar, which it has purchased outright in Innoeye’s case or has an equity investment like Altiostar, for orchestration and Open RAN software, respectively. Mavenir continues to supply the IMS/RCS software and Quanta provides the servers.
RCP made several adjustments in its vendor portfolio when it added 5G support to the network. Rakuten switched from Cisco as a 4G packet core provider to NEC, which will work with Rakuten on building a converged 4G/5G core. NEC also replaced Nokia for the sub-6 GHz radios as Nokia only provides 4G radios for Rakuten. This change was surprising as the NEC 5G radios are actively cooled, whereas state-of-the-art radios are passively cooled. Rakuten did not switch mmWave radio providers which, Airspan continues to provide for 4G and 5G.
One of the powerful features of RCP is that an MNO can mix and match from any vendor in the RCP portfolio. If an MNO prefers Nokia or Airspan as their radio vendor, they can use Nokia’s mmWave product for 5G or use Airspan for both mmWave and sub-6 GHz Airspan’s Open RAN software or use Altiostar’s software.
RCP fits into an interesting sweet spot in the market. Most large MNOs, especially in the United States, will chart their own path towards Open RAN based on how it fits into the current network. Changing or introducing vendors for such a significant network transition is like changing an airplane’s engines in midflight. Small operators, especially if they have already chosen Huawei equipment, are locked in. These operators typically have lean engineering and operations staff that are not trained or sized for such a significant network transition. This makes small operators dependent on large network providers as prime project managers and for vendor financing. Huawei’s growth to become the largest global provider of 5G equipment to MNOs has been based on both significant deployment and customer service capability to the point where almost every Huawei-powered network is a custom network with generous vendor financing packages. A side effect of the customization of each network is that it makes it difficult for other vendors to get a part of the network equipment. Medium-size MNOs and greenfield operators, especially if they are not dependent on vendor financing and the small rural MNOs in the United States who have to replace the Huawei equipment in their network and are collectively paid $1.9 billion to do so are a prime target for RCP. Rakuten’s offering lets MNOs jump to state-of-the-art software-defined networks with Open RAN. Software-defined networks are more flexible and cheaper to operate and due to the standardization of hardware, they are less expensive to buy.
Especially the rural operators who are replacing their equipment should invest in the technology of the future, SDN, and Open RAN, regardless of whether they choose RCP or a custom route, rather than invest in the past’s integrated hardware and software. For rural MNOs who have to run their network with a lean team, SDN’s automation allows the network operation teams to be more efficient and effective. Before RCP, the path to SDN and Open RAN was quite daunting as, for example, Dish’s Charlie Ergen remarked during the Q4 2020 earnings call. RCP solves the complexity problem by allowing rural MNOs to use a working suite of products from another network operator. As a further bonus, several MNOs could combine their network operations and share a common core and operations team for additional cost benefits. Switching to SDN and Open RAN would also work with President Biden’s Buy American initiative. Several leaders in the field are American companies such as Airspan, Altiostar, Cisco, and Mavenir. For all too long, we have complained that there are no American telecom network equipment providers. Now the telecom industry has an opportunity to diversify its vendor base.