Cisco Likely To Compete In The 5G RAN Space Through Acquisitions: Cisco has repositioned many parts of its business to target growth opportunities in 5G, but one thing it doesn’t have is cellular radio access network (RAN) gear.
However, the advancements and hype of open RAN technology has pushed Cisco closer to that threshold alongside its hardware and software for orchestration, 5G cores, radio backhaul, edge computing, and enterprise applications.
Open RAN, a fragmented framework and set of principles that aims to separate hardware from software and allow operators to assemble mobile networks based on commoditized equipment, presents Cisco with a chance to expand its role as a potential supplier of more pervasive RAN gear and software.
An acquisition or series of acquisitions would be the most direct path to such an outcome for Cisco, but it remains to be seen if the vendor is willing to take on a more competitive stance against RAN stalwarts Ericsson, Nokia, Huawei, and Samsung.
Cisco’s Long History of Acquisitions
Cisco CEO Chuck Robbins previously said the company has no plans to build its own RAN hardware for 5G.
But the company has an almost insatiable appetite for acquisitions, and Robbins has changed his mind before, most recently when he walked back on a pledge to not cut any jobs during the COVID-19 crisis.
“We have virtually everything else you need to build 5G networks,” Robbins said in July 2019.
If Cisco does acquire one or multiple open RAN vendors, it wouldn’t represent a major shift in strategy for the vendor, said Roger Entner, founder and lead analyst at Recon Analytics.
“It’s the same old game again,” he told SDxCentral, pointing to Cisco’s $1.4 billion acquisition of IoT startup Jasper in 2016 as just one of many examples of the vendor’s determination to remain a central player with mobile network operators.
“The operators are often not big fans of the vendors, and the one that they typically like the least is Cisco because Cisco, while having a business with the carriers, has a much bigger business with the end customers.
And so it constantly disintermediates and competes that way with their customers,” Entner explained.
“The carriers deliberately open up the competition to small companies to foster innovation and get away from somebody like a Cisco, who is a wolf in sheep’s clothing here,” he added.
How Cisco Could Upend RAN Market
Cisco has an opportunity to upend the RAN market, and while a software play would be easier, “it makes total sense that they go out and buy antenna companies and software companies in that space,” Entner said.
“As much as we want to wish away that hardware doesn’t matter, hardware matters and software matters,” especially when a vendor can bundle both into a more complete offering.
Despite Robbins’ previous dismissal of aspirations in RAN, Entner notes that Cisco has multiple lines of products for RAN at a micro level, especially on WiFi, so the vendor is effectively only on the outside looking in on macro cellular-based RAN.
Moreover, among the large and well-established vendors that supply mobile network operators, Cisco would be the most obvious company to make a stronger push into the RAN market by riding on the wave of open RAN excitement, according to Entner.
Indeed, Robbins somewhat hinted at this during a question-and-answer session at a recent partner summit.
“In the [open RAN] space we have a great orchestration stack that’s being used in a couple of the emerging greenfield players around the world,” he said.
“We’re looking at how we can build a holistic stack that we could potentially even sell to carriers as a service with our partners.”
Robbins added: “I think you’re going to see our role continue to expand in this space.”
Which Open RAN Vendor(s) Could Cisco Buy?
Cisco’s efforts around open RAN thus far are a mixed bag, according to Entner. “It’s almost an aborted launch.
They made a lot of hay out of the partnership with Rakuten for it just to fizzle out. If Rakuten would have chosen them for 5G they would have certainly been a frontrunner, but now everybody’s like ‘well if they’re so good, why did Rakuten not use them for 5G?’”
Rakuten Mobile, a greenfield network operator in Japan, used Cisco services for its 4G LTE deployment but chose to go with other vendors when it began its 5G deployment.
Likewise, Dish Network, a fledgling greenfield operator in the U.S., hasn’t named Cisco as one of its many vendors for its 5G architecture to date.
If Cisco wants to earn more business with mobile network operators, it might have to acquire some open RAN vendors to strengthen its position.
“One would be a good start, but I think they probably need more than one,” Entner said.
But which open RAN vendors would be the best fit for Cisco?
Mavenir has the most broad open RAN portfolio, “but it’s mostly software” and “slowly branching into hardware with IP access,” Entner said.
Another potential target would be Airspan, a Florida-based vendor with open RAN software and hardware, he added. Cisco could also target other U.S. based open RAN startups like JMA Wireless and Parallel Wireless.
“I think what Cisco would probably look for is a U.S. player so that they can play the national security card … and that way keep everything here, which will be as important under a Biden administration as it is under a Trump administration,” Entner said.