US Listing Chinese Firms Spooks O-RAN Alliance Members

Two members of an open radio access network alliance have halted activities over concerns about possible ramifications of the U.S. decision to place three Chinese alliance members on the "entity list" of enterprises deemed security risks. Ericsson and Nokia responded that they remain committed to the project. Resolving the issue could require the O-RAN Alliance to throw out its Chinese members or have the U.S grant an exception, we were told last week.

The alliance, launched in 2018, includes network operators, vendors and research and academic institutions. In August, Nokia said it stopped such work because of the U.S. decision to place alliance members Kindroid, Phytium and Inspur on the entity list because of their role in Chinese military modernization and development of weapons of mass destruction, consultant John Strand wrote.

Nokia's commitment to ORAN and the alliance, "of which we were the first major vendor to join, remains strong," emailed a Nokia spokesperson Friday. Nokia is "simply pausing its technical activity with the Alliance as some participants have been added to the US entities list and it is prudent for us to allow the Alliance time to analyze and come to a resolution." Ericsson is "committed to seeing the work with O-RAN Alliance continue and is supporting activities to help resolve the situation," a spokesperson emailed. The coalition didn't comment Friday.

Telecom software firm Mavenir said it's confident companies worldwide will continue to contribute to global standards organizations like this one. Mavenir CEO Pardeep Kohli said that "we understand that policymakers are in the process of clarifying that American suppliers can and should keep contributing to the Alliance, [3rd Generation Partnership Project] 3GPP and other standards and similar bodies." It's unclear what the U.S. plans to do about ORAN (see 2108270039).

Strand said the alliance is a "closed industrial collaboration" that appears to fall short of the transparency and openness criteria set out by the World Trade Organization's principles for developing international standards. He predicted more companies would follow Nokia's lead, and suggested U.S. authorities may have been overly enthusiastic about using ORAN to solve the Huawei problem.

Being placed on the entity list doesn't necessarily mean companies must stop contributing jointly to industry standards, wrote Telecoms.com analyst Wei Shi. After Huawei and its non-U.S. affiliates were listed, the Commerce Department issued a temporary general license to let American companies continue to engage with Huawei for the "necessary" development of 5G standards and as part of a duly recognized international standards body.

ORAN revenue is projected to approach $10 billion-$15 billion in 2020-25, the Dell'Oro Group reported Friday. Momentum improved in this year's first half, "bolstering the thesis that Open RAN is here to stay," emailed analyst Stefan Pongratz. Asked about the O-RAN Alliance matter, he said the ORAN movement appears to have strong, broad-based support. "No one expects the transition to be smooth," he said: The initial impression is that the alliance events won't affect the overall movement.