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Deutsche Telekom is still reliant on Huawei 5G gear in its RAN, even if it has removed them from its core network.
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Some German politicians want the operator to pivot away from Huawei.
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Open RAN could provide a way to transition, but its deployment is still very slow.
Silverlinings made some calls and took a look at happening with Deutsche Telekom’s open RAN plans, and if that will affect DT’s reliance on Huawei for radio equipment in its cellular network. Here's what we found out.
Huawei still holds a large share of the major European operator’s 4G and 5G radio access network (RAN) despite major political pressure from Europe and U.S. against using Chinese cellular technology.
“In the antenna network (RAN), Telekom primarily uses the two existing suppliers Ericsson and Huawei — because the supplier decision for 4G also meant the decision for 5G manufacturers,” wrote Deutsche Telekom Spokesman, Stephan Broszio, in an email reply to Silverlinings, in which he cited a June 2023 DT blog on the German operator’s proscribed “facts” about critical 5G components.
“In 2022, 59% of the 5G RAN in Germany comes from Chinese vendors,” suggested Strand Consult in a December 20222 report.
According to The Diplomat, it would cost around $3 billion to rip and replace all the 80,000-odd antennas installed in the DT network.
Clearly this is not something that DT is keen to undertake. Tim Hottages, CEO of DT said on the company’s second quarter earnings call in August that “with regard to the high-risk vendors...the German government has released their China strategy and I think it is a very clear statement that there is no decoupling intention from the German government.”
Even so, German politicians are out there making statements that its telecoms providers need to “pivot away” from using Chinese equipment.
“The risks have been known for a long time. Our security authorities have repeatedly warned against one-sided dependencies," Interior Minister Nancy Faeser told German newspaper Handelsblatt in August.
“In the past few years, telcos like DT who had made significant investment in Huawei equipment were (unsurprisingly) pushing back on wholesale rapid replacement, favoring a more incremental and measured approach,” noted Roy Chua, principal analyst at AvidThink in an email to Silverlinings.
Moving to an open, cloud-native future?
So, could a move to cloud-native 5G open RAN help DT kick its Chinese rocks?
“Telekom has named the European producer Nokia and the Japanese producer Fujitsu to open RAN for the first commercial multi-vendor deployment in Germany from 2023,” DT spokesman Broszio told us. The operator has concentrated its first commercial open RAN rollout in one city in Germany, Neubrandenburg.
This contrasts with European mega-rival Vodafone’s recent — if also stalled — launch of open RAN, which plans to deploy 2,500 sites using the technology in the United Kingdom by 2027.
The DT spokesman told Silverlinings that a European deployment of open RAN with Mavenir should start in 2024. He didn’t offer any further details about the open RAN plans for now.
We imagine, however, that a wider rollout across Germany would be a good place to start.
“Because they also want Open RAN to be more than just a new interface and support multi-vendor RAN and virtualized RAN, it will take some time for the economics to make sense,” Stephan Pongratz, RAN analyst at Dell’Oro Group told Silverlinings.
All of which suggests it could take years for DT to unlatch from the Chinese teat.