- Jio wants to build a Made in India telecom network. How viable is that plan and how far can it go?
- What matters is the version of 5G Jio wants to build: the company is lobbying to push a deployment strategy in telecom standards called Option 6, which can’t exploit the full potential of 5G
NEW DELHI : In March, press reports created a buzz in the Indian telecom industry: Reliance Jio has replaced Nokia and Oracle’s 4G voice technology with their own components, and built end-to-end network gear for 5G, the reports said, illustrating how India’s largest telecom operator is now capable of building network equipment.
However, no major swap had taken place, Nokia’s Chief Marketing Officer Barry French clarified on the company’s website. Jio had replaced only one among the dozens of Nokia’s components in its core network and the European company’s technology continues to power Jio’s infrastructure.
Four months later, at Reliance’s 43rd Annual General Meeting in July, Jio’s chief Mukesh Ambani formally declared the company’s ambitions: “Jio has created a complete 5G solution from scratch, that will enable us to launch a world-class 5G service in India, using 100% home grown technologies and solutions.”
The company, however, has yet not shared details on how it transformed itself into an equipment provider with the capacity to build network technology from scratch, and how it solved India’s decades-long challenge of boosting local telecom manufacturing—90% of telecom gear is currently imported.
Interviews with 5G researchers, telecom engineers, industry analysts and a review of public statements by Jio officials suggest it is unlikely that the telco is building a network from scratch with 100% indigenous technology. “Jio is not going to be ‘making in India’,” said Shiv Putcha, founder of Mandala Insights, an analyst firm focused on networking technologies. “Jio has made acquisitions and investments that will help them build the network, but they are not getting into manufacturing per se,” he said.
Instead, Jio is integrating different components of the telecom network, building some on its own, procuring the rest—a strategy made possible by a global push towards open standards and softwarisation of telecom networks.
“The electronics and component manufacturing ecosystem is not quite ready. It will take several years for India to get there,” a senior Reliance Jio executive said on the condition of anonymity. “Even if we accelerate, it will take time for end-to-end manufacturing.”
“What is possible for now is design locally and build components in Taiwan or Korea,” the executive added, explaining that Jio aims to control design and Intellectual Property. But even with that, he said, “our strategy would be a mix of buy and build Jio’s game plan for 5G.”
What also matters is the version of 5G Jio wants to build in the near future: the company is lobbying to push a deployment strategy in telecom standards called Option 6, which, experts said, can’t exploit the full potential of 5G. It will save costs for the company, allowing it to leverage parts of the existing 4G network for providing 5G service, at least initially. The outcome will likely be a better version of 4G with higher capacity, rather than the “true 5G” the world is anticipating.
Jio did not respond to Mint’s detailed questionnaire.Jio’s game plan for 5G
There has been a growing call worldwide for homegrown telecom networks. While China leads the world in 5G, there is reluctance to use Chinese products, owing to the suspicion that Huawei and ZTE deploy backdoors in their equipment to snoop on data on behalf of their government. The US, UK and Australia have already banned Chinese products in their network gear. While India has not announced a formal ban, it practically remains so, especially following the escalating Indo-China border dispute.
For Jio’s perspective, European vendors like Nokia and Ericsson, which appear relatively trustworthy, are expensive. The market is heavily concentrated among the big giants, leaving little choice for telcos. “Equipment vendors sold end-to-end network devices, both software and hardware, as fully-integrated proprietary solutions,” said Dr. SaiDhiraj Amuru, adjunct assistant professor at IIT-Hyderabad. “Telcos realized that this dependency was hurting them and they had no bargaining power,” he said.
Vendors enjoyed this power because telecom networks involve complex engineering. It has two major parts. One, the radio access network, or RAN: the primary wireless component which connects your phone to the nearest base station, and includes hardware components like antennas and towers. Second is the core network: once the signals arrive at the base station, it connects to a more software-focussed core that links to the wider internet.
As the dominance of vendors started pinching operators, they accelerated the process to find alternatives, culminating in an open source movement called Open RAN. The idea is simple in theory: instead of buying the entire network from one company, get each component from a provider of your choice, and integrate it at your end.
This shift—which is fundamental to Jio’s ambitions—is best illustrated through the radio part, which consumes a bulk of the capital expenditure that is required to build a wireless network (estimates range from 60-80% of the total capex costs). “Open RAN aims to break the big black box of telecom networks into several small black boxes. You can pick individual boxes from different vendors or build your own,” Amuru explained.
The key thing is for the boxes to have the ability to talk to each other through established standards, which Open RAN aims to accomplish for the first time with 5G deployment. In December 2018, Jio joined the ORAN Alliance.
Jio’s version of 5G
The focus on Open RAN is important for another reason: it is linked to the version of 5G Jio wants to build for India in the near future. Broadly speaking, there are two deployment modes: standalone and non-standalone, and each has variants depending on how the radio part of the network connects with the core.
“In our country, LTE [4G] cells are 90-98% clogged,” Jamadagni said, in contrast to other countries which are at 5 to 40% capacity. “We are already clogged.” “We are being forced to move into something called a standalone option,” he added. Jio doesn’t want to invest in a 5G core in the near future and is pushing for Option 6 deployment: a standalone strategy where 5G radio connects with 4G core.
“The whole 5G core is a sham,” Jamadagni said. “Why should I be willing to pay 500 million to 1 billion dollars for it? Why would I want to deploy it?” he asked. 5G core is functionally the same thing as a 4G core—especially if you virtualize it—and brings no additional benefits, he claimed. “You please advance in your technology. We want to be behind. We are happy with being behind. If it takes a billion dollars, we are perfectly happy being behind,” he said, in reference to 5G core.
Independent experts don’t agree with Jamadagni’s characterisation.
Shivendra Panwar, a professor at New York University and a researcher at NYU Wireless, said: “You can’t get all the advanced 5G features with a 4G core. There are too many delays built in and you can’t get low latency communication,” he said with regard to Option 6. One can expect improvement in broadband applications—like video streaming and downloads—which would keep subscribers happy, he said, and that may be all that Jio wishes to do for now.
Sandeep Nag, director of 5G at Capgemini, and a former employee at Jio, echoed Panwar’s concerns about Option 6: “Enhanced mobile broadband will be possible but you can’t guarantee end-to-end slicing that delivers quality of service for mission critical use cases like remote surgery and time sensitive industrial manufacturing,” he said. “Vodafone India is doing trials on option 3 with Nokia,” he said.