ORAN Won't Necessarily Make Networks More Secure: Digital Power China

“Open RAN as a concept and technology trend within the industry, and sometimes even the O-RAN Alliance, are cited as potential solutions to the strength of Huawei in 5G infrastructure and the related security concerns,” the DPC report said: “A closer look, however, reveals similar technological dependencies and network security risks in Open RAN to those in single-vendor solutions.”

Any expectation “that a disaggregation of RAN technology will minimize western dependence on Chinese technology is optimistic at best,” DPC said. The report was written by Jan-Peter Kleinhans, analyst at Germany’s Stiftung Neue Verantwortung, and Tim Ruhlig, research fellow at the German Council on Foreign Relations. DPC is a consortium of China experts and engineers based in eight European research institutions.

"China remains best positioned in the global market” for either a single-vendor or O-RAN market, DPC said. “The barriers to market entry for Radio Access Network technology, as well as its components, are high,” the report contends: “Entry requires expertise and is highly capital intensive. High upfront costs mean that telecommunications tends to be a natural monopoly.” The market is “consolidated for a good reason that will not automatically disappear with Open RAN.” DPA predicts: “China’s party-state will be able to sustain an uneven playing field by the very same means it has used to support Huawei.”

China has taken a strong interest in ORAN “to circumvent US sanctions,” and Chinese providers have a “strong presence in the O-RAN Alliance,” which is developing key standards, DPC said. The report cited concerns about the O-RAN Alliance in general. In contrast to the 3rd Generation Partnership Project, “the five founding members have veto rights,” DPC said: The alliance “only develops technical specifications for 4G and 5G RAN. In developing economies that will have a significant 2G and 3G subscriber base for the foreseeable future, there are no technical specifications currently available.” Another difference: “While 3GPP develops standards for a fully functional mobile system, the O-RAN Alliance -- as the name implies -- focuses only on RAN.” The Alliance didn’t comment.

John Strand of Strand Consult, a longtime O-RAN skeptic, also raises questions in a recent report. “There are no ‘net new’ security benefits with OpenRAN,” Strand wrote: “It has no unique security standards or capabilities which are not already present with existing 5G RAN technologies. Open-source software, whether in OpenRAN or classic RAN, does not necessarily make a network more secure.”

ORAN also brings vulnerabilities, Strand said. “OpenRAN presents significant new risks because of the introduction of multiple vendors, components, and interfaces, each with different grades of security, quality, and product development,” he said. While O-RAN “potentially offers some benefits such as reducing dependency on some suppliers, it comes with costs, tradeoffs, and exposure to a new set of risks and dependencies,” he said.

This week, Moody's Investors Service downgraded Mavenir to B3 from B2 after the O-RAN company took out a $95 million loan to fund “anticipated cash burn due to significant research and development spend, which is rising materially (based on Moody's projections), higher working capital needs and a softer top-line growth forecast.” Moody’s noted all previous funding has come from the company’s private equity sponsors. Mavenir didn’t comment.

That follows reports that Parallel Wireless, another O-RAN focused company, cut staff earlier this summer, including most marketers. Eugina Jordan, former executive vice president-marketing, reported the cuts on LinkedIn. “My heart goes out to all my colleagues across the globe that have been impacted by a mass layoff at Parallel Wireless, including yes, myself,” she said: “I was one of the affected as well.”

Parallel CEO Steve Papa confirmed the cuts to Light Reading. "We are making adjustments to right size given the realities of global economic conditions, Covid supply chain constrained world, and the pace of adoption of open RAN," he said. The company didn’t comment Thursday.