My friend Tareq Amin made an interesting suggestion recently: He believes that the RAN Intelligent Controller (RIC) should be given away for free, in order to host the open world of applications for mobile networks. As I circulated at the Mobile World Congress, each vendor had a very different reaction to this concept. The discussion on this point leads to some  interesting conclusions.

First of all, if we look at the smartphone ecosystem, it’s easy to point at the Android operating system and say that here’s an example of a free software platform that enables a rich ecosystem of applications. The smartphone market has essentially collapsed to two major operating systems:  Apple’s iOS and Google’s Android. Other options (Blackberry, HarmonyOS, Windows, others) occupy small niches in the market, compared with the two leaders.

Trying to determine Google’s ROI for giving away Android for free is a difficult calculation.   I would argue that Google made a good move there, giving up a small amount of revenue (hundreds of millions of dollars?) for OS sales but capturing the eyeballs of billions of users and retaining their search-engine market share as the world transitioned from PCs to phones. Along the way, Android allowed Google to dominate the video streaming market with YouTube as well.

Looking back, Google’s bold move was prescient. In 2005, Blackberry was a strong force in the market. Symbian and Palm were leading options. Most other phones used real-time operating systems. The iPhone had not been introduced, so it wasn’t clear how the smartphone world would grow.

So, the Android example suggests that somebody should offer a free RIC to the mobile networks market, and good things will happen. End of Story? Maybe not.

We’ve walked down a logical path, but at this point I have some major doubts. The smartphone market may not be a good pattern to follow in the RAN market. Here are some major differences:

  1.  The legacy hardware is ‘sticky’. In the smartphone market, Android and Apple offered a better experience with App Stores, and the world changed over readily. Thing don’t change in such a fluid way for the RAN market, because of legacy 2G/3G/4G systems that keep operating.
  2. The market is fragmented. We’re tracking at least 10 different RIC vendors, including all of the major RAN suppliers and several new entrants such as STL, VMWare, Juniper, Mavenir, Altiostar/Rakuten Symphony and others.   
  3. Customers demand two sources. In the smartphone market, each customer chooses one solution and lives with it. But major RAN customers typically have two network vendors with different solutions, to maintain some level of competition between players.
  4. The vendors with major market share positions have no interest in giving software away for free. In fact, some of the big gorillas in the market will actively resist true interoperability.
  5. Maybe the most important factor here: There’s no ‘advertising’ angle to play that makes giving away a free software layer a good idea. For “free” to pay off, a ready pool of revenue (at least 10X bigger than the revenue you’re sacrificing) must be standing by that depends on the “free” platform. That’s not in place yet in the mobile network. It’s possible — maybe precise location data will become as compelling as ‘eyeballs’ are in the search engine market. But it’s not there yet.

In my forecast, I am predicting over a billion dollars in annual RIC software revenue when the market matures. But I do not believe that all of this will be as “open” as the smartphone or PC markets have been…in fact, most of the revenue in my forecast will apply to RIC software bundled together with radio software or hardware.  

I’m still hopeful that we will see a future with fluid xApps and rApps, running on a small number of RIC platforms in the market. But I believe that we will go through a painful period first, as the ORAN Alliance will need some time to develop interoperability between the RICs, the networks and the apps. For the next four years, I don’t think that free RIC options will pay off.

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Categories Analyst Angle, Business, Open-RAN, RAN Intelligent Controller