Operation O-RAN: The US plan to neutralize Huawei (and why it will work)

Samuel Howarth, DIGITIMES Asia, Taipei 1


The US has a devastating not-secret plan to beat Huawei once and for all.

The US and China are fighting for control of the global telecommunications architecture that underlies all mobile communications, including the Internet. Each superpower has selected its prizefighter in the battle for cyberspace.

In a contest for the control of the internet, China is backing RAN (Radio Access Network) architecture, the traditional radio element of a cellular network. The US is putting its money behind a low-key emerging architecture called O-RAN (Open Radio Access Network).

The reason behind the US O-RAN push is simple. O-RAN will topple Huawei for good.

The US is orchestrating a campaign at home and abroad to persuade the world to drop RAN in favor of O-RAN. The move would pull the throne from under Huawei, finally ending the company's reign as the world's biggest telecoms equipment vendor.

The Washington Post wrote that US President Biden has appealed to the leaders of India, the Philippines, and Saudi Arabia to adopt O-RAN. The campaign is part of a push to persuade countries to say yes to Open RAN and no to Huawei.

The US Congress appropriated $500 million for the International Technology Security and Innovation (ITSI) Fund for developing O-RAN technology. The country's Public Wireless Supply Chain Innovation Fund, authorized under the National Defense Authorization Act (NDAA), added another $1.5 billion to speed up the process.

What on earth is RAN?

A Radio Access Network (RAN) is an essential element of telecommunications infrastructure, facilitating the connection of wireless-enabled devices to various segments of a central public or private network. In essence, the RAN functions as the radio portion of a cellular network.

Given the importance of RAN infrastructure in the functioning of wireless devices, it's easy to see that control over it equates to control over the internet. A monopoly of such infrastructure is a boon for whoever claims it, and a threat for those who do not.

The radio, hardware, and software are proprietary in a conventional RAN setup. This means that most of the equipment originates from a single supplier.

In the RAN framework, operators cannot mix radios from one vendor with hardware and software from another vendor when deploying a network. RAN is the status quo of mobile communication networks.

The current RAN landscape is dominated by a five-company oligopoly. The dominant players include China's Huawei and ZTE, Scandinavia's Ericsson and Nokia, and South Korea's Samsung.

Huawei is the global leader in supplying RAN equipment. This is a headache for the US.

Enter O-RAN

An Open Radio Access Network (O-RAN) is an open-source rendition of the Radio Access Network (RAN) infrastructure. It facilitates interoperability among cellular network equipment supplied by various vendors.

The US O-RAN push is based on the rationale that having multiple suppliers offers an alternative to closed end-to-end systems that depend on Chinese equipment. This could end Huawei's dominance of the market.

Huawei as telecoms boogeyman

Fears about using Huawei's equipment relate to the belief that the company is an arm of China's ruling communist party which uses it to gather SIGINT or signals intelligence on the country's western adversaries, including the US. In a 2019 interview with Fox News, then US President Donald Trump said, "We don't want [Huawei's] equipment in the United States because they spy on us."

Suspicion and opposition against Huawei among Western governments and companies began in earnest in 2012 following a series of cyber-attacks against US companies and Western governments. There was a broad consensus within the US government that the attacks were mounted by China.

In 2012, a US congressional committee approved a proposal aimed at identifying and removing technology developed by Chinese telecommunications firms from the U.S. nuclear weapons infrastructure. In the same year, the country's House Intelligence Committee concluded that Huawei and ZTE Inc were national security threats.

However, Digitimes analyst Benson Wu suspects that the official reasons the US gives for choosing not to use the Chinese telecom giant's equipment might be disingenuous. He said that the reasons for the effort to flush the ubiquitous Chinese tech out of the US telecoms system might be economic and protectionist rather than purely related to national security concerns, as US politicians often claim.

Benson said that Huawei has been used in the US for longer than people think. Security was never an issue when Huawei was providing the infrastructure for 2G and 3G communications, he added.

Benson said the argument that the US is preventing Huawei's access to the country for national security reasons does not stand up to reason. Companies from other communist countries such as Vietnam are not subject to similar restrictions, he added.

The Huawei killer

Benson said that O-RAN originally began as a commercial idea. The technology was coopted by US authorities to remove Huawei and China from the US telecommunications nerve system, he added.

Benson said the US hopes to persuade the world to switch from RAN to O-RAN. However the US proposition is not the easiest to sell for various reasons, he added.

When it comes to the Huawei question, Benson said that the world's largest vendors such as Nokia and Ericsson find themselves trapped between a rock and a hard place. They are forced to walk a geopolitical tightrope and balance US and Chinese interests.

In October 2020 Swedish regulators banned the use of Huawei from its 5G networks. In November of the same year, Ericsson's CEO Börje Ekholm criticized the blanket ban.

He argued for a more nuanced response. Sweden should take measures to mitigate risks to its 5G network, he added.

In response to the ban, Gao Feng, a spokesman for the Ministry of Commerce said "China urges Sweden to immediately correct the mistake, and meet China halfway and find solutions based on preserving China-Sweden economic and trade cooperation." Ericsson's Q12021 sales in China subsequently tanked.

If Sweden did not follow the lead of the US in banning Huawei, Ericsson could have been hit by a limitation on its access to the US market, Benson said. This demonstrates that political and commercial interests are sometimes at odds when it comes to the Huawei question, he added.

Benson said the US rip-and-replace strategy is complicated by the invisible hand of the market. Huawei's equipment is significantly cheaper than that of other vendors, he added.

The rip-and-replace initiative, implemented in 2020, requires American enterprises to remove telecommunications equipment manufactured by Chinese firms Huawei and ZTE. The US warns that equipment from these companies might be exploited by Beijing for espionage purposes and the illicit acquisition of proprietary information.

US operators need to find an alternative to fill the equipment void, Benson said. The problem is that the equipment supplied by trusted vendors such as Ericsson and Nokia is much more expensive than Huawei and ZTE's.

Not all US operators are as big as AT&T Benson explained. Some operators are much smaller and not so wealthy, he added

Benson noted that smaller operators find it difficult to afford alternatives in Huawei's absence. The US government is providing subsidies to companies to help them rip and replace, but they do not come close to the cost-effectiveness of using Huawei's ostracized Chinese tech, he added.

Ericsson plays it smart

Benson said the US$14 billion open RAN deployment deal between US carrier AT&T Ericsson demonstrated the conflicting motives complicating US efforts to promote O-RAN. AT&T's choice of Ericsson was telling, he added.

AT&T's pick of Ericsson for the initial deployment of the carrier's open radio access network (RAN) caused some in the telecom industry to scratch their heads. Ericsson was not regarded as a prominent vendor in the open RAN space and was more associated with the more traditional and financially stable RAN architecture.

Ericsson's offering was unique, Benson said. The deal included deploying O-RAN base stations and traditional closed RAN base stations, he added.

This model allowed Ericsson to adopt a Janus-like position to the US O-RAN push, Benson explained. Ericsson could play ball with the US government's O-RAN promotion while not appearing to be completely behind it, he added.

This is not a cold war

Benson said that the China-US telecommunications standoff should not be considered a tech-cold war. In the Cold War there were competing different ideological standards, he added.

When it comes to telecommunications, there is only one standard, he said. That standard is the 3GPP he added.

The 3GPP consists of seven national or regional telecommunications standards organizations collaborating to develop protocols for mobile telecommunications. The US Alliance for Telecommunications Industry Solutions (ATIS) and China's China Communications Standards Association (CCSA) are 3GPP organizational partners.

Geopolitical tension manifests in telecommunications as a schism in supple chains, Benson said. Once tensions lead to sanctions on equipment from a certain country, then two distinct supply chains form, he added.

No telecom security standards

Benson said there are no international standard operating procedures for assessing the security of wireless communication equipment. Without guidelines operators have no way of measuring potential risks, he added.

Benson said the O-RAN ALLIANCE is an interesting character in this story.

The O-RAN ALLIANCE is a community of mobile network operators, vendors, and research & academic institutions founded by AT&T, China Mobile, Deutsche Telekom, NTT DOCOMO, and Orange in 2018. The organization's mission is to "re-shape the RAN industry towards more intelligent, open, virtualized and fully interoperable mobile networks".

Benson said the US effort to promote O-RAN to topple Huawei puts the O-RAN ALLIANCE in an awkward position. Given that the alliance is made of Chinese vendors such as China Mobile, if it is seen to be promoting O-RAN, Chinese vendors could be seen as shooting themselves in the foot, he added.

Explaining the dilemma facing the O-RAN ALLIANCE, Benson said, "There are some Chinese equipment vendors in it". "How can they promote this industry to replace their own products?" he asked.

Better the devil you know

Benson said the US promotion of O-RAN as a solution to fears of built-in backdoors in Huawei's equipment is hypocritical. The US is keenly aware of such threats because it has used similar means to spy on targets, he added.

Benson cited the example of the US National Security Agency (NSA)'s PRISM program. PRISM was a system that enabled the US government to gather user data from corporations such as Microsoft, Google, Apple, Yahoo, and others.

O-RAN can be risky business

Benson warned that O-RAN is not without its own security issues. O-RAN equipment is vulnerable to attack, he added.

The interoperability and the ability to pick and choose equipment from different vendors could be a blessing and a curse, Benson said. O-RAN's increased cost efficiency could come at the price of a larger attack surface for bad actors who would steal information, he added.

Benson explained the security challenge of switching from RAN to O-RAN with a metaphor. A network is like a house, Benson said.

"If my house has one window, it's not easy for a burglar to get inside", he said. "If you increase the number of windows then it increases the risk of your house getting broken into", he added.

Damned if you RAN, damned if you don't

The US argument that O-RAN is safer than using Huawei equipment is paradoxical Benson, said. The choice between RAN and O-RAN architecture means you can either let the Chinese communist party access your personal data via Huawei's equipment, or you can kill Huawei with O-RAN and let everyone hack you, including the US, Benson explained.

Benson said he sees a slow but visible telecommunications shift toward O-RAN. However, this shift is not driven by Washington's will, he added.

Benson said in the short term, vendors will embrace a half-open half half-closed strategy to the O-RAN issue. This is the approach Ericsson took in its deal with AT&T he added.

Telecom operators naturally favor O-RAN because it gives them the freedom to choose whose equipment they use, Benson said. It also allows increased competition and cheaper equipment, he added.

Squeezing Huawei with the invisible hand

Even if the US successfully uses the "Huawei killer" O-RAN to dispatch the Chinese telecom giant, Washington could only be considered an accomplice. The final nail in Huawei's coffin will be hammered in by the invisible hand of the global telecommunications market, not the long arm of Washington.