Spying an opportunity to branch into other areas of the telecom sector and building on its growing optical fibre business, Mumbai, India-based Sterlite Technologies Ltd, also known as STL, announced in March 2021 the formation of its Access Solutions Business Unit to focus on “Open RAN, 5G, programmable FTTx, and controller/orchestration software” and hired Chris Rice, a former senior VP of network infrastructure and cloud at AT&T, to head up the unit. Less than two years later, STL’s management has decided that was a leap too far and that it will cease its investments in wireless and open-source R&D, starting in its fiscal fourth quarter (January to March 2023), and instead focus on its growing optical and network services lines of business.
The move into specific areas of telecom software, including the development of a RAN intelligent controller (RIC) platform, was not such a strange move for STL, which had added OSS, BSS and policy-control products to its portfolio in 2015 with the acquisition of Elitecore, another Indian vendor, as part of its strategy to broaden its appeal to telcos. From that point on, it also invested R&D funds to develop software-defined networking (SDN) and other virtualisation and programmable network systems.
The development of wireless hardware products, which had begun before the formation of the Access Solutions Business Unit, was a bigger departure, though. By August last year the company had already developed indoor small cells, 5G multi-band macro radios and Wi-Fi 6 access solutions, and then announced plans to design and develop 4G and 5G Open RAN radios based on the Evenstar reference design developed by Facebook Connectivity (now Meta Connectivity) and its partners.
Then a month later, in September 2022, STL announced Accellus, its wireless-fibre converged solution portfolio that included its RIC development and a programmable FTTx product for software-defined fibre access networks – see STL launches Accellus – an end-to-end fiber broadband and 5G wireless solution.
And this year, at MWC Barcelona 2022, it unveiled Firebird, a range of Open RAN-compliant wide area 5G radios.
However, while the market for Open RAN technology certainly exists and is growing, it has so far been mainly tied to three markets: In Japan, Rakuten Mobile has used some Open RAN elements in its 4G and initial 5G rollouts, while NTT Docomo and KDDI have also included Open RAN technology in their production networks; in the US, the 5G newcomer, Dish Network, has launched its service using an Open RAN-based network; and in Europe, 1&1 has contracted Rakuten Symphony to build and run a greenfield Open RAN-based 5G network that has started to generate revenues for the vendor.
And while plenty of other big names, including the European quintet of Deutsche Telekom, Orange, Telecom Italia (TIM), Telefónica and Vodafone are supporters and are either at the very early stages of initial deployments or still in test-and-trial phases, they haven’t pulled the trigger on major deployment investments so far.
Research house Dell’Oro Group has been tracking momentum and expects the market for Open RAN equipment (radio and baseband products, but not associated professional services) to be worth almost $20bn during the 2022-26 period, with much of that stacked towards the back end of that period (around $6bn a year by 2026). So revenue opportunities in Open RAN right now are limited.
At the same time, revenues and opportunities in STL’s core lines of business – optical fibre, optical interconnect products and network construction services – are increasing. In its fiscal second quarter that ended 30 September, STL reported revenues of 17.68bn Indian rupees (INR) (US$217m), up by 17% year on year and 12% compared with the previous quarter, and claimed to command 11% of the global fibre optical cable market (outside of China). That market continues to grow, as does STL’s share, and the company has been developing products ideally suited to meet growing demand in its domestic market, where India’s operators are investing in fibre networks to support 5G and broadband strategies. Ray Le Maistre is Editorial Director at TelecomTV