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The interoperability of telecommunications systems, made possible through O-RAN, is key to leveraging the technical and commercial possibilities of 5G and 6G technology. By encouraging vendor diversity in the supply chain, O-RAN technology can also help mitigate supply chain risks, lower costs and spur innovation. As new communications technologies become more widely adopted, U.S. leadership will be essential for the development and adoption of O-RAN standards and the technological and commercial advantages that this brings.
A Radio Access Network (RAN) is a major component of a wireless telecommunications system that connects individual devices to other parts of a network through a radio link. Conventionally, the RAN technology stack developed by one company, including the antennas, the base stations, and radio units, is incompatible with those developed by another firm.
In contrast, Open Radio Access Network, or O-RAN, is a non-proprietary system that focuses on interoperability among cellular network equipment sourced from diverse firms and providing various hardware and software components. As such, it represents a paradigm shift in telecommunications networking systems.
Once deployed at scale, O-RAN will enable easier upgrades, increased scalability, and cost-efficiency by allowing network operators to integrate hardware and software from multiple suppliers all interoperable across a set of O-RAN technology standards.
O-RAN brings with it significant technological advancements and potential. Experts believe that O-RAN’s multi-vendor system, which does not rely on specific countries or suppliers for the full suite of RAN technology, can help mitigate supply chain risks.
In addition—because O-RAN is a non-proprietary, open system accessible to various vendors—it lowers the barriers to entry for new innovators. Until now, the barrier to entering the RAN market has remained high. The long R&D cycles and significant capital investment required to compete make it especially difficult for smaller companies that lack sufficient resources to develop alternate full-scale infrastructures. By allowing firms to compete for the different parts of the RAN hardware and software stack, O-RAN enhances competition and promotes technological development, allowing smaller firms or startups to introduce technologies into the market and enter the telecommunications supply chain more easily.
Lastly, by decoupling hardware and software functions, O-RAN promotes a more cost-efficient ecosystem, reducing deployment and maintenance costs. With O-RAN, companies can expect the same level of performance using unbranded servers instead of installing expensive proprietary servers.
While O-RAN opens new technological frontiers and was developed in part as a counter to Chinese telecommunications giants like Huawei and ZTE, its open access system introduces both challenges and opportunities in the current geopolitically turbulent era. Initially, there were concerns about the potential for suspect equipment to plug into the global telecommunications infrastructure. However, the modular design of O-RAN actually enhances security in several ways. For instance, O-RAN allows operators to quickly replace or address any suspect equipment and shift network capacity on demand. This flexibility enables rapid responses to potential threats—whether from pre-installed malware or attempts to exploit open systems—by allowing deployment of security capabilities closer to the network edge and facilitating on-demand shifts in network capacity. Additionally, U.S. and Japanese companies currently lead the O-RAN stack, with participation from other allied and partnering countries. Countries deploying O-RAN are aware of the technology they are purchasing and its origins.
Despite these technological security enhancements, fears of cyber threats from China persist. In response, the United States has implemented a series of policies that have led to a de facto embargo against the sale and import of telecom equipment from Chinese firms Huawei and ZTE. The big three telecommunication companies in China—China Telecom, China Unicom, and China Mobile—have been listed under the Department of the Treasury's Office of Foreign Assets Control's Non-SDN Chinese Military-Industrial Complex Companies list since 2021.
To promote U.S. competitiveness in O-RAN development, the U.S. government has taken several measures, including the introduction of funding programs and tax incentives. In 2021, Congress passed the Open RAN Outreach Act. The legislation offers outreach and technical support to small providers regarding O-RAN.
In 2023, an expansion of the Act was introduced to Congress, tasking the Department of Commerce’s National Telecommunications and Information Administration (NTIA) with supporting small communication network providers in understanding and utilizing O-RAN networks and participating in the Wireless Supply Chain Innovation Grant Program.
The U.S. government is also exploring other avenues, including direct grants, to promote the adoption of O-RAN technology. Funded by the CHIPS and Science Act of 2022, the NTIA announced the Public Wireless Supply Chain Innovation Fund, a ten-year, $1.5 billion grant program to support the development of open wireless networks. The program promotes secured 5G+ technologies and advances the deployment of open and interoperable equipment. As part of this initiative, NTIA has recently made several awards, including the latest announcement of $420 million.
Previous Wireless Innovation Fund grants have supported a consortium of U.S. carriers, foreign carriers, universities, and equipment suppliers to establish a testing, evaluation, and R&D center in the Dallas Technology Corridor and a satellite facility in the Washington, D.C. area. The center will focus testing on network performance, interoperability, and security, and facilitate research into new testing methods.
NTIA’s funding program focuses on two goals: a) driving commercialization by incentivizing suppliers and operators to collaborate; and b) encouraging innovation through R&D opportunities.
The first goal requires radio suppliers to partner with operators to develop products that meet operators’ performance and feature requirements. Bringing sellers and potential customers together, it is believed, will increase the chance of commercial deployment. NTIA encourages domestic capacity building and development of radio unit products on U.S. soil but still allows certain overseas activities including operator lab and field testing. The second focuses on the advancement of radio innovation by funding research areas that support future radio performance and capabilities.
The United States needs to exert leadership in setting and maintaining O-RAN-related standards in close coordination or collaboration with European and East Asian allies and strategic partners. This calls for collaboration with incumbent RAN providers like Ericsson and Nokia, as well as with O-RAN technology leaders such as Samsung and Rakuten.
Industry organizations and global standards bodies play a key role in shaping the O-RAN development. O-RAN Alliance, a global partnership of mobile network operators, vendors, and research institutions in the RAN industry, aims to reshape the industry for more open and virtualized network conditions by providing specification effort and different testing standards. Through the O-RAN Alliance and the 3rd Generation Partnership Project (3GPP), many industry players are also defining security requirements and testing for O-RAN components and interfaces.
The United States has collaborated bilaterally with key allies, such as Japan, to promote secure and open telecommunications infrastructure. Some of the leading companies in O-RAN technology—NTT and Rakuten—are from Japan.
Further, leaders from the United States, Japan, Australia, and India gathered in 2021 to discuss the importance of encouraging trustworthiness among global telecommunications vendors through O-RAN. The Indo-Pacific Strategy joint statement released by the White House acknowledges the essential role of the O-RAN technology and how the four countries will continue to facilitate public and private cooperation for an enhanced 5G diversification environment.
In addition, there have been active conversations among industry leaders regarding potential international cooperation. European companies including Deutsche Telekom, Vodafone, Orange, and Telefonica and American companies including Verizon, AT&T, and Dish have expressed their support for O-RAN.
There is currently a shortage of engineers and professionals with expertise in O-RAN technology in the United States, including those already working in the traditional, single-vendor RAN industries. This lack of a skilled workforce hinders the United States from building a resilient and competitive domestic O-RAN ecosystem. At the same time, the United States needs to lead in O-RAN research and commercialization to attract the best and brightest to this emerging market. This dynamism needs to be accompanied by reforms in the U.S. immigration system that encourage high-skilled workers to stay and contribute to the nation’s leadership in this and other advanced technologies.
Julia Yoon is a research intern with the Renewing American Innovation Project at the Center for Strategic and International Studies (CSIS) in Washington, D.C.