Japanese conglomerate Rakuten wears multiple hats. Its focus has been diverse, covering businesses like commerce, digital infrastructure, and technology. One common attribute across all these businesses are disruptive and futuristic practices.

The company’s most recent business as a greenfield mobile network operator in Japan has become a key discussion in the industry. Rightly so, as Rakuten is the world’s first to run a fully virtualised mobile network. Rakuten, in fact, launched its 4G network in April 2020 for commercial use. Fast forward to August 2021, and the company is now in the business of building virtualised mobile networks for telecom operators.

Rakuten formally introduced itself as a full-stack telco technology provider through the Rakuten Communications Platform (RCP) launch in October 2020. Since then, the telco claims to have signed deals with 15 operators globally for RCP, with Germany’s 1&1 mobile being the most recent. Rakuten worked with multiple vendors to implement the entire technology stack up, from radio to the BSS layer for its very own greenfield mobile network. The company’s vendors, partners, and in-house capabilities are put together under RCP.

RCP has multiple partners across various network layers and functions. For core, Rakuten used Cisco for 4G. Later on, it switched to NEC for a converged 4G/5G core. On the service orchestration and OSS layer, Innoeye fits as the telco’s in-house technology. Mavenir provides IMS and RCS capabilities, while the open RAN software is from Altiostar. Radio units come from various vendors such as Nokia, Airspan, and NEC. The unique proposition is RCP’s ability to offer complete flexibility in choosing various components of the technology stack from different vendors.

Rakuten and its more recent decisions on acquiring Altiostar and creating Symphony have placed the operator as a strong contender among open RAN vendors. On this note, we have analysed Rakuten’s ambitions to scale its newly established network business.

#1. Altiostar’s 5G and 4G virtualised open RAN software is important for Rakuten RCP business

The announcement by Rakuten to acquire an open RAN vendor, Altiostar, continues with the creation of a new business unit, Symphony. The event’s timing is apt. While Rakuten has been advancing its RCP ambitions, Symphony establishes a dedicated telco business by combining all its telco network solutions under one single unit.

This is an interesting development given the recent shifts in the global telecom equipment market. The long-established network equipment market is expecting disruptions at multiple fronts. Technology is one. Achieving 5G’s full potential demands disaggregated, virtualised, and software-defined networks. This has created hopes for new-age vendors who have built their complete network solutions stack to support virtual deployments with open, programmable interfaces.

twimbit expects open RAN to become mainstream over the next ten years. By 2030, more than 60% of access network spend will shift to competing RAN architecture, supporting open interfaces and virtualisation.

Altiostar is an integral part of the RCP stack. It fits under the network functions business, and its 4G and 5G RAN software is already available as part of the telco platform.

Figure 1: Rakuten Symphony

#2. Having gone through the challenges of multi-vendor deployments, Rakuten sees value in a vertically integrated stack

Acquiring technology partners is not new to Rakuten. It had acquired Innoeye in 2020 – which fits the OSS and orchestration layer. While Rakuten promotes a partner-driven marketplace, snapping Altiostar sends a strong signal on developing an integrated technology stack.

Close integrations between the three layers of RCP, including intelligent operations, network functions, and unified cloud, is important, particularly from an automation and orchestration viewpoint.

Architectural changes to the network with open and virtual RAN has multiple implications from the OSS perspective. Many analysts suggest evolving existing OSS solutions is key to ensuring large scale adoption of Open RAN. In its own experience, Rakuten sees this as a critical piece of integration. Having better control of both Innoeye and Altiostar under Symphony will help RCP address integration challenges.

RCP then offers Rakuten private cloud to host the virtual baseband (CU/DU) infrastructure. It has also developed NFV infrastructure that enables operators to deploy virtual network functions or cloud-native functions. As things move to cloud or multi-cloud, integration, automation, and orchestration complexities will increase.

#3. Open RAN gets a big boost, but will openness prevail?

Two direct benefits for Altiostar are access to RCP clientele and resources. The ability of existing vendors to scale Open RAN is an important factor determining the success of the technology. The foray by Rakuten into open RAN provides the much-needed boost for access to both financial and intellectual resources. Rakuten also brings the learnings and skills developed during the implementation of its own Open RAN based network.

Yet, at the same time, the platform-driven approach that aims at building ecosystems with few partners would limit choices for operators. Similar efforts are run by other system integrators, with each then promoting their system of pre-integrated solutions built from a selective list of vendor partners. In this scenario, while there will be open interfaces and virtualised technology, multi-vendor participation (as shown in the figure below), which is a key distinction between open RAN and other RAN technologies, will be limited.

For RCP, the solution to this problem lies in letting customers either pick a complete end-to-end stack or choose specific functions across the five layers. Rakuten, however, still needs to ensure alternatives within the same functional layer.

Figure 2: Defining open RAN

At the radio level, the likes of Altiostar and Mavenir have developed partnerships with hardware suppliers. That means Comba, MTI, NEC, Fujitsu, Airspan, and other radio hardware suppliers can integrate software from Altiostar and Mavenir to ship pre-integrated radio units. Similar dependencies exist with virtualised environments, where RAN software vendors have worked with virtualisation platform providers (VIM platform) to bring fully integrated offerings to the market.

In twimbit’s view, Open RAN is shaping up to disrupt the traditional RAN market and will become a mainstream technology in the next ten years.

The current shaping of the open RAN market suggests the majority of this opportunity may remain with vendors offering pre-integrator solutions and validated ecosystems.

Figure 3: Global Open RAN market size, 2020 – 2030

For other key trends in telecoms, read our research on Top telco priorities for 2021