Could Tareq Amin be Mavenir’s white knight?

• The Open RAN market hasn’t developed as Mavenir had hoped
• The vendor has other lines of business but it’s been struggling to grow as planned
• Aramco Digital, which is headed up by Open RAN evangelist Tareq Amin, is reportedly considering a major investment of up to $1bn that would provide a lifeline for the vendor 

Mavenir is reportedly on the verge of a $1bn capital investment from Saudi firm Aramco Digital, which is headed up by Open RAN evangelist Tareq Amin, in a move that would provide the US competitive mobile networks vendor with a much-needed lifeline. 

Mavenir, one of the early pioneers of Open RAN technology, has long hoped that investments in disaggregated multivendor radio access network deployments would flourish and provide it with a growing revenue stream. While views vary on the current status and prospects for Open RAN, it’s clear that it hasn’t taken off as many had hoped. The major early Open RAN investments were in greenfield networks in the US, Japan and Germany, where new telcos emerged to compete with the incumbents, but these investments have not been followed by much in the way of Open RAN spending by traditional mobile operators – see Open RAN investments plummet – report.

And where there have been pockets of investment, the lion’s share of the business has gone to established players, such as Ericsson (at AT&T, for example), or larger new entrants, such as Samsung Networks (at Telus, for example), rather than alternative suppliers, such as Mavenir. 

That has left Mavenir exposed: While its portfolio also includes 5G core systems that generate revenues from multiple network operators, including major telcos such as Deutsche Telekom, its Open RAN revenues have been much slimmer than was hoped, despite its engagements with the likes of Dish Wireless in the US. 

And it was noticeable at the recent Fyuz24 event in Dublin, one of the annual gatherings for Open RAN specialists, that Mavenir did not have a presence on the show floor and its major executives were absent from the speakers lineup. 

Earlier this year, the company raised $75m from an unidentified existing investor to help it continue to compete but its prospects don’t seem to have improved and, late last week, credit ratings agency Moody’s downgraded its credit rating and tagged it with a negative outlook, a move that reflected a greater risk of defaulting on interest payments due to weak liquidity, limited cash reserves and a lack of commitment to further funding from existing investors, reported Bloomberg. “After investing over $1.5bn, the company’s equity sponsors have turned definitely uncommitted to providing any additional capital support, leaving no certain back-stop,” noted the Moody’s report, which also highlighted that Mavenir missed an interest payment in September. 

But just as Moody’s was consigning Mavenir to the corporate graveyard, Reuters reported that Aramco Digital, the tech branch of Saudi oil giant Aramco, is in talks with Mavenir regarding a $1bn investment for a 33% stake in the company, as well as a $200m investment in a joint venture that would focus on network technology developments in Saudi Arabia and regional markets. And while that report didn’t mention Amin, it will be his hand behind any such development from Aramco Digital, of which he became CEO late last year after leaving Rakuten Mobile, where he had spearheaded the deployment of Open RAN technology at the Japanese greenfield operator. Since his appointment at Aramco Digital, Amin has been forging Open RAN relationships with the likes of Intel and Samsung.

Mavenir declined to comment on the report, while Tareq Amin has yet to respond to our request for comment. 

Amin’s interest in Mavenir makes sense, given his view that an Open RAN architecture is the most suitable approach to the development of next-generation radio access networks, his focus on Open RAN developments in Saudi Arabia, and the fact that Mavenir already has years of Open RAN research and development under its belt. In addition, of course, Aramco has the financial chops to support such an investment.  

If Aramco Digital does indeed invest in Mavenir, it could well be a lifeline for the vendor that could help it, ultimately, achieve its business goals. If any such deal falls through, though, the prospects for Mavenir in its current guise look grim. 

- Ray Le Maistre, Editorial Director, TelecomTV