On 25 February, during a roundtable discussion between US President Donald Trump and Indian CEOs, Mukesh Ambani rose to speak. “We’re the only network in the world which doesn’t have a single Chinese component,” the Reliance Industries Ltd (RIL) chairman said. Some saw it as a facile attempt to play to Trump’s famous anti-China rhetoric. Within Reliance Jio Infocomm—RIL’s telecom subsidiary—it was seen as a sales pitch: Jio could play a part in building the next generation of US telecom networks.
And while it partnered with Samsung to build its $46 billion pan-India 4G network, its 5G project is going to be a DIY effort as its 10-year lock-in period with the Korean telecom major is set to run out in a few years.
Jio isn’t alone in its efforts to make its own 5G equipment. There has been a global movement driven by major operators like Vodafone and AT&T to set specifications and standards in line with operators’ requirements. Based on principles of openness openness The Ken In 5G, radio access network becomes a plug-and-play technology by breaking its functionalities into different units Read more and interoperability, the movement, called O-RAN O-RAN O-RAN Alliance The Open Radio Access Network Alliance has 23 operators as members and over 140 technology companies as contributors , seeks to end the hegemony that’s long existed in the telecom equipment space.
Traditionally, the 3rd Generation Partnership Project (3GPP), which is led by large vendors like Ericsson, Nokia, Qualcomm, Huawei, ZTE, and Samsung has set standards, with operators forced to follow.
“Vendors make a specification and then make a product out of that specification. Operators’ requirements are not fully taken into account. Vendors develop specific protocols for hardware to talk to software, and that costs a bomb,” said a senior executive working closely with a leading Indian operator.
5G networks are especially given to this. Software and hardware are now two separate commodities, and both can be sourced separately. Crucially, while the intellectual property resides in software, hardware has been commoditised and could be bought off the shelf. As a result, even German businesses like automaker BMW and air carrier Deutsche Lufthansa are building private 5G networks, well ahead of Germany’s telcos.
Jio is also hitching its cart to these open standards. The use of open interface networks, that too, developed in house, could bring down Jio’s capital expenditure by nearly half, said multiple executives working closely with Reliance Jio. This is vital in a country like India, where 5G use cases will not emerge from day one and the average revenue per user average revenue per user ARPU The average revenue per user (ARPU) for the industry stood at 130 by end of March 2020 remains low.
