How Open RAN Lost Its Revolution: Why Telecom’s Big Disruptor Failed to Break the Oligopoly

The promise of Open RAN as a disruptive force in telecom has faced significant challenges, preventing it from achieving the widespread adoption and industry transformation originally envisioned. Here’s why Open RAN’s revolution stalled, and the key issues operators have encountered along the way:

1. Integration Complexity & Vendor Dependence

Open RAN was supposed to allow operators to mix and match components from different vendors, breaking free from proprietary, end-to-end solutions. However, integration between multiple vendors’ hardware and software has proven far more complex and costly than anticipated.

• Operators need extensive testing and validation to ensure interoperability, adding delays and expenses.
• The lack of standardized plug-and-play compatibility means operators often end up relying on system integrators or incumbent vendors (like Nokia and Ericsson) to stitch everything together.
• This has eroded the cost benefits, as the savings from vendor competition are offset by increased operational and integration costs.

2. Performance & Reliability Concerns

Telecom operators prioritize network performance, uptime, and reliability, and Open RAN has struggled to match the efficiency of traditional RAN solutions:

• Energy efficiency: Open RAN systems generally consume more power than fully integrated RAN solutions, affecting operational costs.
• Latency & Quality of Service (QoS): Some Open RAN deployments have struggled to deliver carrier-grade performance, particularly for high-demand applications like 5G.
• Optimization challenges: Proprietary solutions from Nokia and Ericsson come with built-in AI-driven optimizations that fine-tune performance—Open RAN vendors have had difficulty replicating these advantages.

3. Security & Trust Issues

The Department of Defense (DoD) and other major operators initially backed Open RAN for its potential to reduce dependence on foreign vendors and enhance security. However, concerns have emerged:

• Fragmented security responsibility: With multiple vendors involved in Open RAN setups, ensuring end-to-end security is more difficult compared to a single-vendor approach.
• Unproven security track record: Operators hesitate to deploy Open RAN in critical networks due to a lack of real-world testing at scale compared to traditional RAN solutions.

4. Nokia & Ericsson’s Standards Influence

As highlighted, Nokia and Ericsson have leveraged their influence in global standards bodies to shape Open RAN in ways that reinforce their dominance.

• By embedding their intellectual property into Open RAN standards, they ensure that their own solutions integrate best, making it easier for operators to default back to their proprietary ecosystems rather than dealing with interoperability headaches.
• Operators like AT&T and Verizon, while publicly supporting Open RAN, have continued to sign large contracts with Nokia and Ericsson due to their proven reliability and existing vendor relationships.

5. Funding & Scale Disadvantages for U.S. Vendors

The U.S. aimed to rebuild its telecom manufacturing base by promoting Open RAN, but American vendors face major funding gaps compared to their European counterparts:

• Nokia and Ericsson each spend billions on R&D annually, giving them a technological and scale advantage over smaller Open RAN players like Mavenir and Parallel Wireless.
• U.S. government funding initiatives, such as the Public Wireless Supply Chain Innovation Fund, have not been large enough to level the playing field.
• Without a strong manufacturing base, Open RAN adoption remains limited to pilot projects rather than widespread deployments.

6. Operator Hesitation & Business Model Challenges

Major telecom operators have been slow to transition fully to Open RAN due to:

• Risk aversion: They fear operational disruptions from unproven technology.
• Long-term vendor relationships: Existing contracts and network deployments with Nokia and Ericsson make it difficult to switch.
• Unclear cost benefits: Initial Open RAN trials have not shown the dramatic cost savings operators expected.

Conclusion: Why Open RAN’s Disruption Stalled

Instead of breaking free from the telecom oligopoly, Open RAN has become an incremental evolution rather than a revolution. Nokia and Ericsson have effectively co-opted the movement, ensuring that Open RAN remains an extension of their platforms rather than a truly open and competitive alternative.

For Open RAN to fulfill its original promise, operators and governments must:

1. Invest heavily in alternative U.S. vendors to make them competitive.
2. Enforce stricter procurement policies to prevent single-vendor dominance.
3. Streamline interoperability to reduce integration costs and complexity.

Without these changes, Open RAN will remain a niche technology rather than a true disruptor, and the U.S. telecom sector will continue to rely on European incumbents.