With the US Open RAN market starting to simmer, Verizon has decided that now is a good time to provide an update on its rollout.

February 6, 2024

3 Min Read

The telco has now deployed more than 130,000 O-RAN capable radios in its commercial network. It doesn't mean necessarily that Verizon is operating a commercial network running on O-RAN standards. It means rather that a proportion of its network has O-RAN compatibility baked in, so that when the technology is ready for prime time, Verizon will be too.

At this point, it's worth noting again the distinction between Open RAN and O-RAN. The former describes the principles of open standards-based radio access networks, while the latter relates to a specific set of open networking standards drawn up by the O-RAN Alliance. Verizon's announcement repeatedly refers to O-RAN, so we'll assume it's talking about these.

"Verizon is fully supportive of O-RAN technology and is focused on commercialising an operationally sound O-RAN architecture," said Adam Koeppe, SVP of technology planning at Verizon. "Our commitment to developing O-RAN standards and to deploying compliant equipment in our active radio access network is helping to drive the industry forward which will result in a variety of tangible benefits for our customers who expect leading-edge technology from Verizon."

Verizon has been slowly but steadily building up to this point, paving the way for Open RAN by undertaking a multi-year deployment of vRAN. Early in 2019, it overhauled its core network, rolling out cloud-native, containerised architecture. And in 2020, it completed the full virtualisation of its baseband functions.

"Verizon's vRAN efforts run in parallel with and overlap Open RAN efforts, an evolution of the virtual network architecture that will offer up a new set of benefits, technical advancements, and innovation on the radio access networks that serve wireless customers across the nation," Verizon said.

Indeed, according to Counterpoint Research, North America is expected to be one of the biggest Open RAN markets for the rest of this decade. It expects mobile operator spending on Open RAN to reach $30 billion worldwide by 2030.

That forecast might prove to be a little conservative given it was published before AT&T announced plans to spend $14 billion over the next five years on an Open RAN network.

Meanwhile, it's worth touching on the timing of Verizon's announcement. It's just got out of a quiet period, which might go some way to explaining its motivation for talking up its achievements.

In the financial report that marked the end of that quiet period, Verizon revealed that capex in 2023 fell to $18.8 billion from $23.1 billion in 2022, and that it expects it to fall further in 2024 to $17 billion-$17.5 billion. As talking points go, an announcement about 130,000 O-RAN radios offers an alternative to the narrative about slowing capex.

Open RAN is also considered a strategically important technology by the National Telecommunications and Information Administration (NTIA). It is perceived as a means of reducing US reliance on foreign-made tech, and gives the US a shot at redemption in the global cellular networking market.

Over the last few months, the NTIA has begun awarding grants from its $1.5 billion Wireless Innovation Fund in an effort to stimulate homegrown Open RAN development.

Until recently, it was the usual suspects getting the cash – universities, R&D labs and the odd tier two vendor. Until January, that is, when Dish made headlines by pocketing $50 million to spend on a lab that will carry out Open RAN interoperability testing.

Then of course there was AT&T's announcement in December about its Open RAN deployment with Ericsson as lead hardware supplier.

There is favour to curry, positions to jockey for, and PR points to be scored for US telcos that demonstrate they are leading the development of this 'strategically important' network technology. It also doesn't do any harm to get this message across ahead of Mobile World Congress.

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