In conjunction with its recent Rakuten earnings call this week, Rakuten Mobile disclosed some more of its plans. This mobile operator is becoming a telecom vendor. Specifically, it said that “by expanding the Rakuten Communications Platform (RCP) globally, Rakuten aims to evolve from a Japan-headquartered tech company to a global leader in telecom.” We see this as an explicit statement that the company plans to sell its telecom software and related services to operators worldwide. For instance, Rakuten Mobile just announced a partnership with Saudi-based operator, stc. This move pits Rakuten against Microsoft (who just acquired telecom companies and runs a cloud), Oracle (who runs a cloud and made telecom company acquisitions), and the rest of the telecom industry (traditionally Nokia, Ericsson, Huawei, ZTE, Amdocs, Netcracker and others).
In offering RCP to other operators around the world, its unique value, as we see it, is that Rakuten has successfully built an LTE and now a 5G network based on Open RAN. What we find interesting is that the company has developed a significant amount of intellectual property in-house or through technology sharing. In an interview today with Tareq Amin, Rakuten Mobile executive, we asked what technology has been developed in-house by Rakuten. Here’s what we learned.
Some other components are not developed by Rakuten (the radios come to mind), but this is an exciting development. RCP would be delivered as a “private cloud” on the premises of carrier customers (partners). The terminology Rakuten is using for this “private cloud,” is it’s a “pod.” RCP’s plans are a very interesting development in the industry.
There is one more thing. Rakuten said it is working with a technology supplier that will sell Rakuten a server card that would allow a combined router and RAN processing function to co-exist on a server. Today, the servers it uses to support its Open RAN radios use an FPGA NIC. These servers can support up to 16 base stations. We see the addition of routing to this card as an extension of the capability – but it means there may be a diminished need for cell site routers.
Ericsson and Cisco representatives provided an upbeat presentation about the corporate partnership, offered some customer success metrics and discussed some new initiatives. The teams held back from providing concrete measures of progress such as revenues. Our judgement is that since each is continuing to make joint offerings, the relationship is moving ahead.
Customer engagement progress was characterized at 100+ deals and 300+ engagements.
It is interesting to figure out what each of the two parties deliver to customers. The way the two companies characterize what each is good at and what each delivers to customers is quite similar to the way it was characterized at the previous year's MWC 2016 presentation - with one possible exception: Each of the spokespersons said that customers are using the Ericsson wireless packet core (Cisco also sells wireless packet core).
Roles and Responsibilities. Generally, the teams still see the roles and responsibilities split up as follows:
Given how strategic the NFV landscape is for the future of the telecom industry, we were interested in each company's participation in NFV Orchestration. The partners say the way they split up the orchestration between each other would typically be as follows: Cisco's NSO is used typically in managing the network and resources (Cisco claims it wins big here). Ericsson's transport-oriented NFV is typically used. And then Ericsson's orchestration system manages both Cisco's and Ericsson's lower level management systems.
Some wins discussed:
As we explained earlier, the partners discussed new three initiatives discussed for the future:
At the Ericsson Media and Analyst Briefing today, Ericsson's new CEO Borje Ekholm made his first MWC presentation, and then ceded the stage to well-known T-Mobile USA (TMUS) Chief Technology Officer, Neville Ray. We learned several things that were interesting: T-Mobile's plans for 5G rollout and 2G/3G shutdown, and Ericsson's high-level view on its strengths as 5G rolls out.
Neville Ray's comments conveyed a pragmatic and agile service provider's views: