Telefónica Shakes Up 5G Race With Rakuten Deal

Telefónica is teaming up with a pioneering Japanese eCommerce company in a bid to speed up the rollout of 5G.

Telefónica said on Wednesday (Sept. 26) that it will work with Rakuten to develop an OpenRAN (radio access network) system, a deal that will enable the Spanish telecom giant to roll out 5G service without having to deal with the controversial Chinese heavy-hitter Huawei.

The Madrid-based company is a major global player and owner of mobile network operator O2 in the United Kingdom, Germany and other countries across the world.

The two companies announced they have inked a memorandum of understanding “to cooperate on a shared vision to advance OpenRAN, 5G Core and OSS (operations support systems).”

Telefónica is planning a sweeping rollout of OpenRAN technology following an intensive round of testing next year.

“Beyond the flexibility and simplicity that OpenRAN will provide, it will change the supplier ecosystem and revolutionize the current 5G industry in the medium and long term,” said Enrique Blanco, chief technology and information officer at Telefónica. “At the same time, open and virtualized networks will lead to a new telco operating model.”

The deal comes as government officials in the U.K. and the U.S. battle to curb Huawei’s growing power in the emerging 5G global market, citing security concerns stemming from the tech and telecom giant’s ties to the Chinese government.

In particular, the use of OpenRAN enables telecom carriers like Telefónica to pick and choose the parts for their emerging 5G systems from a range of different companies, instead of having to rely on Huawei.

For its part, Rakuten has been making headlines, jumping ahead of competitors as it rolls out a 5G network in Japan.

“I envision our partnership to also co-explore further development around Rakuten Communications Platform that will enable operators around the world to take advantage of cost-effective cloud-native mobile network architecture that is secure and reliable,” said Tareq Amin, representative director, executive vice president and CTO of Rakuten Mobile.