NTT has announced a joint research programme with NEC, while also purchasing a 5% stake in the network infrastructure vendor.

Jamie Davies

June 26, 2020

3 Min Read
NTT buys 5% NEC stake to add more momentum to ‘open’ ecosystem

NTT has announced a joint research programme with NEC, while also purchasing a 5% stake in the network infrastructure vendor.

Some might suggest the ‘open’ movement is receiving a disproportionate amount of attention, there are limited OpenRAN trials compared to the market hype, however this latest move from NTT adds more credibility to the foundations of the ecosystem.

The research initiative will focus on creating open architectures, such as OpenRAN, as well as supercharging NTT’s IOWN initiative, a programme to create network solutions based on photonic technology (lasers, fibre-optics etc.). This new venture will also give the pair an opportunity to sell new products, for example, a Digital Signal Processing (DSP) circuit, as well as optical transmission equipment incorporating this DSP circuit.

These technologies might only be the tip of the iceberg, with NEC promising the venture will also work with global telecoms operators and communication equipment vendors to develop products based on the O-RAN Alliance specifications.

Alongside this research venture, NEC has also announced NTT will purchase 13,023,600 shares of NEC’s common stock, which roughly equates to a stake of 4.8%. Like Rakuten, NTT is seemingly betting on the eventual success of the ‘open’ ecosystem but acquiring a stake in NEC also affords the telecoms operator some influence in the product development roadmap.

This is a very interesting development, as while research ventures are valuable to the community, this is also a market of credibility to the ‘open’ ecosystem; the more telecoms operators who are bought in, the more viable the ecosystem looks.

While there is certainly potential for the ‘open’ ecosystem, some might suggest the hype vastly outweighs the reality. This would surprise few, as the ability to hype a technology seems to be somewhat of a speciality for the telecoms industry.

Japan’s Rakuten would be the most prominent example of OpenRAN being implemented, but there are also trials at Vodafone, O2, MTN and Telefonica, while Dish in the US is keeping a keen eye on developments. In Germany, Mavenir recently announced it had completed trials with Deutsche Telekom for a containerized 5G Core solution.

There is progress being made in this space, but perhaps it should be placed in perspective. This is an embryonic ecosystem, still finding its feet. When we asked readers when they thought OpenRAN would be market ready, the results were quite interesting:

  • 14% – it is ready right now

  • 8% – 2021

  • 26% – 2022

  • 37% – 2023 or beyond

  • 15% – it never will be

It does appear the majority are looking at the technologies with a sense of realism, but then again there is a healthy amount of scepticism. When asked who would win the RAN battle in LATAM, only 6% selected OpenRAN. 59% believed Huawei would prosper the most in the region, while 20% put their faith in Ericsson.

The shift in priorities for network infrastructure is a healthy move for the industry. It creates additional competition, and by removing the prospect of ‘vendor lock-in’ it opens the door for more innovation.

Such progress should be put in suitable context, however; let’s not get too excited just yet. That said, the more telecoms operators who dive in, like NTT has done here, the more credible the ‘open’ ecosystem looks to others.

Is OpenRAN given a disproportionate amount of attention for progress thus far?

  • Yes, it is a promising tech but still to early for this amount of hype (38%, 9 Votes)

  • Not really, the attention is appropriate (33%, 8 Votes)

  • Yes, too much value is being placed in this ecosystem which will probably fail (17%, 4 Votes)

  • No, it should have more attention if anything (13%, 3 Votes)

Total Voters: 24

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