1&1 wants to start building its own mobile network in 2021. Open RAN still has to prove that it will be the hoped-for cost killer.
For the The mobile phone provider 1&1 is planning to set up its own network with initially 12,000 antenna locations. The company estimates that this should make it possible to meet the expansion requirements of the Federal Network Agency. By the end of 2030, 1&1 must cover around half of German households with its network, a quarter by 2025. “But we want to be faster,” said Michael Martin, CEO of Drillisch Netz AG, on Wednesday at an event organized by the industry association VATM. Martin also explained what the network of the future should look like.
1&1 wants to build its network based on Open RAN and has hired the Japanese Rakuten group for this. The German Rakuten subsidiary is to set up and operate the network as a general contractor. “We had discussions with the usual vendors and then decided on Rakuten,” said Martin. The classic equipment suppliers such as Huawei, Ericsson or Nokia still supply individual components at most. CEO Ralph Dommermuth explained in August that 1&1 wants to start with antennas from NEC.
Network launch for customers not until 2023
1&1 had bought spectrum for LTE and 5G at the 2019 frequency auction. The United Internet subsidiary has so far offered mobile communications services with network services that it purchased from the network operators. Now 1&1 wants to be the fourth mobile network operator in the markett. The auctioned LTE spectrum at 2 GHz will not be available to the company until 2025. Until then, 1&1 can still use frequencies that Telefónica has to cede as a condition for the merger of O2 and E-Plus. Thanks to a roaming agreement with Telefónica, 1&1 is becoming a customer outside of its own network in the O2 network.
The requirements of the Federal Network Agency require 1&1 to supply at least 1000 locations with 5G by the end of 2021. But it will probably take until the beginning of 2023 before the network goes live and existing customers can be migrated to their own infrastructure. First of all, 1&1 would like to open up enough locations to cover sufficiently large contiguous areas with the network, explained Martin.
From Open RAN, 1&1 expects lower costs not only in the construction but also in the operation of the network . The architecture makes it possible to do without the proprietary hardware of the telecommunications suppliers in the radio access networks and to virtualize their functions in software. This happens on standard hardware as used in every data center. “We use hardware from Dell and QCT for 1&1,” said Raimund Winkler, head of Rakuten Mobile Germany.
This means that 1&1 can do without the housing for base stations directly on the antenna, for example , explained Martin. In the 1&1 network, the antenna is connected directly to one of the more than 500 Far Edge data centers. With the additional infrastructure at the antenna location, the costs and work for the maintenance of the systems are also eliminated, said Martin: No air conditioning units that have to be serviced, no filters that have to be replaced.
However, the cloud structure of the network requires numerous locations for larger and smaller data centers. 1&1 plans its network around four large data centers for the core network functions, around which around 20 to 30 edge data centers are grouped, to which around 500 far-edge data centers are connected. The two edge rings take on different functions for the wireless network, such as signal conversion and signal processing.
Japan as a role model
Rakuten already operates its own Open RAN mobile network in Japan. But that shouldn’t be “one to one” be transferred to Germany, emphasized Martin and prefers to speak of “Rakuten 2.0”. We also want to learn from the mistakes that were made there. By far the greatest challenge at the moment, however, is the search for a location.Finding suitable locations for antennas and other technology is a problem that all mobile operators face.
For 1&1 it makes sense to rely on Open RAN when setting up a new network. The established mobile operators are also experimenting with the new technology, but are still reluctant. They face the problem of integrating Open RAN with the proprietary hardware of their suppliers. In addition, Open RAN is not yet ready to serve all mobile phone variants and frequencies.
Rakuten blows the horn. “We want to be the world’s leading provider of this technology,” said Winkler, speaking of nothing less than a “revolution.” the telecommunications industry. To underline these ambitions, the Japanese group recently took over the Open RAN specialist Altiostar. However, Rakuten also knows the dark side of network construction: It costs a lot of money.
In Japan, Rakuten Mobile recently exceeded the five million customer mark. In order to keep them and to be able to supply more customers, more antennas have to be built and locations have to be developed for them. To this end, Rakuten recently secured a stake in the Japanese infrastructure company JTOWER. The division’s loss has doubled to the equivalent of around 1.5 billion euros in one year. Rakuten estimates that it makes money from around 7 million customers.
Open RAN “a chimera”?
While carriers hope for less equipment dependency, Politicians see Open RAN as an opportunity for more independence from China. But not all industry experts believe in the revolutionary potential of Open RAN. Telecommunications expert Torsten Gerpott, for example, believes that network operators and politicians are “sitting on a chimera”. He refers to the high integration costs for the new technology, which are not incurred by the established suppliers.
“New modules must also be coordinated with each other and with the RAN used up to now in different ways for each 4/5G network operator become”, Gerpott writes in a guest article for the Frankfurter Allgemeine Zeitung. This is time-consuming and associated with considerable costs. “The additional costs are currently becoming clear, for example, for the Japanese mobile network operator Rakuten, where the O-RAN expansion costs will probably double compared to the original plan of around 5 billion euros.”