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A week in telecoms: Open-RAN, 5G in Malaysia, IoT and CPaaS

Anne Morris
20 Jul 2023
A week in telecoms: Open-RAN, 5G in Malaysia, IoT and CPaaS

A week in telecoms: Open-RAN, 5G in Malaysia, IoT and CPaaS

Welcome to the Inform weekly news round-up, where we take a look at a selection of recent telco news and how it impacts the wider industry.

Gloomier outlook for open RAN 

Open radio access network (RAN) and disaggregation proponents will not have been greatly cheered by the latest report from Dell’Oro Group, which revised downwards its latest five-year revenue forecast for the global open RAN market by 5% to 10% throughout the forecast period.

While the analyst firm remarked that open RAN has come a long way in just a few years, and already accounts for a mid-single digit share of the broader RAN market, it made its first downward forecast revision because of hesitancy about these next-generation architectures.

According to Dell’Oro, open RAN adoption has been mixed across greenfield and the brownfield operators. “With greenfield and early adopter brownfield deployments maturing, the reality the industry is now facing is that it will take some time for the other segments to match and offset the more stable trends with the early adopters,” the company said.

Open RAN revenues are still projected to account for more than 15% of global RAN by 2027. Dell’Oro noted that European operators are ahead when it comes to announcing open RAN targets, but have been more cautious with deploying the technology, focusing on building out 5G using traditional RAN. The European open RAN market is expected to surpass $1 billion by 2027.

Stefan Pongratz, Vice President and Analyst at the Dell’Oro Group, did point out that the revision is more a near-term calibration than a change in the long-term growth trajectory.

“This journey of ‘re-shaping’ the RAN was never expected to be smooth and many challenges remain. Even so, our long-term position has not changed. We continue to believe that open RAN is here to stay, and the growing support by the incumbent suppliers bolsters this thesis,” Pongratz said. 

Open RAN is certainly no walk in the park for mobile network operators, with much work left to be done to enable widescale deployment, at least according to Deutsche Telekom. According to Heavy Reading’s 2023 Open RAN Operator Survey, MNOs also see potential for the open wireless technology in private networks, but appear to be cautious and not quite ready to whole-heartedly back it in enterprise settings.

Telenor and Verizon Business tie on IoT

Telenor and Verizon Business became the latest two operators to collaborate on global IoT connectivity. They have formed a strategic partnership that aims to provide global IoT services to enterprise customers, with an initial focus on expanding the eSIM-based network access and service footprint of both companies.

Debika Bhattacharya, Chief Product Officer at Verizon Business noted that the move reflects the reality of doing business in the massive IoT era. 

“The number of IoT devices is expanding rapidly and fleets are fanning outward, so our customers need flexible, reliable connectivity that moves across borders. With partners such as Telenor, Verizon will be able to provide that: a globe-spanning footprint with seamless eSIM IoT connectivity,” Bhattacharya said.

Telenor said the US is a key market for many of its global customers. According to Mats Lundquist, CEO of Telenor Connexion and Head of Telenor IoT, “together with Verizon we can streamline our customer’s solutions and supply chains while enabling even more reliable access to the US market. This includes local network functionality, which is a catalyst for the next generation of consumer services as well as 5G-enabled critical services.”

A recent TM Forum report explored how operators with IoT businesses are trying to build new value propositions and revenue streams beyond connectivity, embracing technologies such as 5G, edge computing and mobile private networks.

Vodafone is a key player in this market, for example, recently setting up an ‘Economy of Things’ joint venture with the Japanese conglomerate, Sumitomo. Their aim is to capture business from securing financial and data transactions between machines, starting with the automotive sector. In addition, Vodafone Spain recently won a €25 million deal to supply 315,000 water meters over five years to Canal de Isabel II, the local government-owned water utility in the Madrid region.

In order to achieve greater coverage, Arun Menon, Principal Analyst at MTN Consulting, has noted how communications service providers (CSPs) are increasingly collaborating with satellite operators to provide enterprise IoT offerings. “Through partnerships with satellite operators, telcos can address connectivity gaps where 5G is poor or yet to be built out. Enterprises can switch to a satellite network seamlessly instead,” he said. 

Malaysia’s Maxis to join DNB as CelcomDigi eyes second 5G network

In March 2021, Malaysia’s then government mandated the creation of a single, national cloud-native wholesale 5G netco, called Digital Nasional Bhd (DNB), to serve the country’s existing communications service providers (CSPs).

The country’s network operators were given the opportunity to acquire equity in DNB and four did so: YTL, Telekom Malaysia, Digi and Celcom (now merged under CelcomDigi). In May 2022, YTL became the first operator to launch 5G services using DNB’s wholesale network.

However, the wholesale 5G network plan came under criticism in its home market and Malaysia’s other telco, Maxis, said it would await the results of a review of the national wholesale 5G plan by Malaysia’s new government before seeking shareholder approval for investment in DNB.

Now, Maxis finally intends to sign an agreement to access the country’s state-run 5G network. The CSP said it was ready to sign the access agreement as it was in its best interests and there were no other 5G options.

In the meantime, Malaysia’s government announced that the implementation of the 5G network in Malaysia will continue through DNB until it reaches 80% coverage in populated areas by the end of 2023. Once that coverage target has been achieved, Malaysia plans to adopt a dual network model for its 5G rollout next year. This means that the country could see a second 5G network at some point during 2024. 

This change in strategy appears to have been in response to widespread concerns about pricing and competition over a single state-run network, which is being built by Ericsson.

The move to allow a second 5G network also prompted CelcomDigi to terminate the separate agreements of Digi and Celcom to subscribe for a 12.5% stake each in DNB. The group indicated that it wanted “to play a more active and direct role” in the development of the nation’s 5G network.

In July, the operator then announced a partnership with Chinese vendors Huawei and ZTE to “build Malaysia’s future digital network recently — integrating and modernising the largest 4G network in Malaysia with the latest LTE and 5G-ready technologies.”

Proximus fuels CPaaS ambitions with Route Mobile buy

Belgian CSP Proximus agreed to acquire a majority stake in Mumbai, India-based communications platform-as-a-service (CPaaS) specialist Route Mobile for an initial sum of about €643 million. 

The acquisition of a 58% stake in Route Mobile will be made by Proximus Opal, which in turn owns Telesign, the Belgian CSP’s digital identity and CPaaS unit. Route Mobile and Telesign will be merged to form a single operation and some of Route Mobile’s founding shareholders will then acquire a stake in Proximus Opal.

The transaction is expected to be completed within the next six to nine months. For Proximus, the move builds on the combined strengths of Route Mobile and Telesign in order to “pave the way to become one of the worldwide leaders in the fields of digital communications (CPaaS) and digital identity (DI).”

Proximus said it has already built up a significant presence in the CPaaS and DI markets thanks to Telesign. The strategic acquisition of Route Mobile generates substantial scale, with annual revenue of around €900 million for Route Mobile and Telesign combined, the CSP said, noting that it will become the third-largest CPaaS player globally.

Indian operator Bharti Airtel and Facebook owner Meta recently announced plans to collaborate in areas such as CPaaS. Airtel plans to integrate Meta-owned messaging platform WhatsApp within its Airtel IQ CPaaS platform in order to support omni-channel customer engagement. The two companies aim to address the growing demand by enterprises for cloud-based services in India.

Orange extends 5G SA in Spain

Orange Spain became the first operator in the country to launch 5G standalone (SA) services and has also been deploying the technology to serve enterprise customers. It recently said it had developed a 5G SA virtual private network for the Port of Barcelona to support mobile communications both at land and sea. 

As explained by Joaquín Colino, General Manager for B2B at Orange Spain, this project “is an excellent example of the new and advanced services that this network can provide in business and industry. The adaptability of these networks is essential in an increasingly dynamic and competitive business environment, where agility and responsiveness are key to success.”

Orange Group has elected Spain as its frontrunner for 5G SA, and is also currently testing the technology in its domestic market of France. Only Madrid, Barcelona, Valencia and Seville initially had what Orange is calling “5G+” coverage, with more cities to be added during 2023. The key suppliers are Ericsson, Nokia and Oracle Communications.

Orange Spain now has competition, however: Telefónica Spain has also launched 5G SA in around 700 locations throughout the nation on compatible Xiaomi smartphones. The operator is aiming for 1,000 locations by the end of the year, underpinned by its 3.5GHz spectrum, and said 5G SA currently covers 11 cities: Madrid, Barcelona, Malaga, Seville, Palma de Mallorca, Las Palmas de Gran Canaria, Ávila, Segovia, Castellón, El Ferrol and Vigo.

According to the May 2023 report from the Global mobile Suppliers Association (GSA), just 35 operators in 24 countries and territories “are now understood to have launched or deployed public 5G SA networks.” About 240 service providers have now launched commercial 5G services based on the non-standalone variant.