What’s up with… KDDI & Samsung, KT, 6G & the RAN market

• KDDI picks Samsung as primary Open RAN partner
• KT reorgs and plans job cuts
• RAN market in the doldrums… until 6G

In today’s industry news roundup: KDDI is ready to ramp up its Open RAN activities with Samsung as its main vendor supplier; South Korea’s KT Corp. is restructuring its operations and looking to reduce its headcount as it focuses on its AICT strategy; the radio access network (RAN) equipment sector isn’t set for an upturn until 6G sales start to kick in from about 2029, according to the crystal ball gazers at Dell’Oro; and much more!

After years of pilot deployments, Japanese telco KDDI is ready to ramp up its Open RAN-enabled rollout in 2025 and has selected Samsung Networks as its main technology partner. Other technology suppliers include Hewlett Packard Enterprise (HPE), which will provide its servers, Intel (processors) and Red Hat (cloud platform). The vendor, which has been involved in KDDI’s trial Open RAN deployments in Tokyo and Osaka, will supply the operator with 4G and 5G Open RAN-compliant virtualised radio access network (vRAN) solutions as the lead vendor partner. “KDDI has been focused on identifying and preparing for next-generation networks, and we have been conducting numerous technical verification and feasibility studies on Open RAN with industry-leading companies like Samsung,” noted the telco’s CTO, Kazuyuki Yoshimura. “Today’s announcement represents KDDI’s dedication to bringing innovative technologies to Japan. We are proud to deliver a cutting-edge and reliable radio access network.” Samsung will supply its vRAN 3.0 solution, a full suite of Open RAN-compliant radios (including advanced massive MIMO products) that support low- and mid-band spectrum and integration support for the deployment of radios from other suppliers. Samsung is also providing “key features of the Samsung CognitiV Networks Operations Suite (NOS), an intelligent solution that automates the lifecycle management of large-scale vRAN buildouts. The features streamline the onboarding, deployment and operation processes, enabling KDDI to transform its widespread network efficiently,” noted the vendor in this announcement.

KT Corp. is establishing two new subsidiaries and aiming to reduce its headcount via a large-scale voluntary redundancy programme as part of a broad restructuring initiative, according to Business Korea. Final decisions about the processes are due to be made at a board meeting on 15 October. As many as 5,700 KT staff could be affected by the restructuring and redundancy programme, a move that would reduce the number of staff employed as part of the telco’s core operations to around 12,000. Like its close domestic rival SK Telecom, KT is now focusing its efforts on AI-related developments – its new relationship with Microsoft is a clear example of the company’s AICT strategy that was unveiled earlier this year. 

The radio access network (RAN) equipment market is going to continue shrinking until 2029 before increasing in value as 6G investments kick in, according to a long-range forecast from research house Dell’Oro Group. “Following a 40% to 50% revenue growth between 2017 and 2021, the RAN market is now facing a second consecutive year of steep declines,” noted the firm, which recently highlighted that the value of the RAN market is expected to decline at a 2% CAGR over the next five years (with TelecomTV’s back-of-the-envelope calculations putting the size of the market this year at about $35bn). “While the pace of decline is expected to moderate after 2024, downward pressure is likely to persist until 6G becomes a reality,” the research firm added. Quite what kind of reality that will be is not yet known and, as is already becoming apparent, there is some pushback from parts of the operator community against the idea that telcos will need to invest heavily in 6G RAN equipment and the Dell’Oro team recognises that. The inability of 5G to “significantly alter the flat revenue trend among operators [is] fuelling increased scepticism regarding the need for substantial investments in new technologies,” noted Dell’Oro (though, as we heard recently, the team at Deutsche Telekom would claim to be an exception to that rule). Stefan Pongratz, VP of RAN and telecom capex research at Dell’Oro Group, noted: “Some scepticism is warranted. After all, operators invested over $2tn in wireless capex [capital expenditure] between 2010 and 2023 to build out 4G and 5G, yet revenues remain flat. Looking ahead, operators will need to optimise their spectrum roadmaps to address various data traffic scenarios. Our base case assumes that mobile data traffic growth will continue to slow, enabling operators to improve their capital intensity ratios, which will, in turn, put further downward pressure on the RAN market. However, additional capacity will eventually be required and, at that point, leveraging larger spectrum bands and the existing macro grid will likely offer the most cost-effective solution.”

Roll up, roll up for India’s ‘tariff repair’ era… Telecom analysts at JPMorgan are predicting an average Indian telecom tariff hike of 15% by 2027, The Economic Times has reported. The investment bank notes that the Indian telecom sector has long been plagued by low returns, compounded by a “lack of relief on adjusted gross revenue [tax] liabilities,” but now the current regulatory climate should mean that telcos can increase tariffs without alienating consumers. The analysts point out that Indian mobile tariffs remain significantly lower than those of their Asian peers, so ongoing “tariff repair” – a value judgement very much determined by whether you’re the biller or a payee – is likely to be given the green light by the Indian regulatory authorities over the next few years so that India’s major telcos can “alleviate balance sheet stress” to foster a more stable investment environment. The country, which boasts more than 1.1 billion mobile connections, has three main operators – Reliance Jio (with 40.68% market share), Bharti Airtel (331.12%) and Vodafone Idea (18.46%), with state-owned telco BSNL the only other player of note (7.59%).  

NTT Docomo has launched a new project, dubbed 6G Harmonized Intelligence, to examine the potential of next-generation cellular communications technology. “This project is the first step in realising Docomo’s vision of 6G as a ‘network for AI’,” noted the operator. Information about the project will be exhibited at the YRP Open Innovation Day, to be held from 18 October at the Yokosuka Research Park (YRP), where Docomo’s R&D organisation is located. 

– The staff, TelecomTV