US will lose 5G race if it continues to close markets
Consumers to pay more without Chinese tech
The US will lose its edge in the race to develop 5G, the next generation of mobile internet networks, by taking a protectionist stance and excluding Chinese companies from its market, industry representatives said.
While the US government has blocked Chinese telecoms from selling network infrastructure equipment and continues to urge its allies to do the same, Xu Zhijun, Huawei’s rotating CEO told CNBC on Thursday that US’ ambitions in advancing 5G technologies may not end well.
After Washington blocked Chinese telecoms including Huawei and ZTE Corp from providing networking equipment, the US has tried to persuade countries such as Canada, Australia and South Korea to reject networking products from Chinese firms.
New Zealand’s barring the use Huawei 5G technology on Wednesday is the latest example of a country compromising its interests under pressure from the US, industry representatives said.
Chinese companies take part in setting global standards for the next generation of technologies and they have also become major infrastructure suppliers, both of which have become irresistible forces in the 5G era, industry representatives said.
Huawei has signed 5G contracts with about 50 carriers around the world and has accelerated network deployment, the company said in a statement sent to the Global Times on Friday. It has also delivered more than 10,000 5G base stations to the global market, the statement said.
“What’s a market? The market means competition, no competition, no market,” Xu told the Global Times in an interview in October in Shanghai. “Competition makes us do better,” he said.
Huawei became the world’s largest telecom equipment provider in 2017, surpassing Ericsson and ZTE, according to media reports.
Huawei has a 28 percent market share in the global telecom infrastructure industry, followed by Ericsson and Nokia, which have 27 percent and 23 percent respectively, industry website telecomlead.com reported in March, citing IHS data.
China has emerged as the largest telecom market in the world in terms of subscribers, and with the help of favorable government policies such as spectrum allocations and cost reductions, domestic companies are much more competitive in the 5G race, Cui Kai, research manager for IDC, China’s telecommunications and Internet of Things (IoT) Group, told the Global Times on Friday.
“Also, advantages in China’s whole supply chain have become more obvious [in winning the 5G battle],” he said.
Chinese equipment providers have also been recognized by partners in overseas markets despite growing pressure from the US.
“There is only one true 5G supplier right now and that is Huawei – the others need to catch up,” Neil McRae, chief architect of British telecom firm BT, was quoted as saying in recent media reports.
The US will pay a heavy price for rejecting major players from participating in the development of the next generation of mobile networks, Xiang Ligang, chief executive of telecom industry news site cctime.com, told the Global Times.
“With the participation of companies like Huawei, the cost of establishing 5G infrastructure will be at least 30 percent lower, and it will speed up deployment,” he said.
Countries such as China, Japan, and South Korea are setting the pace on 5G adoption through rapid installation and aggressive investment, while the US lags behind, Deloitte said in a report released in April.
Since 2015, China outspent the US by $24 billion in wireless communications infrastructure and built 350,000 new sites, while the US built fewer than 30,000, the report showed.
“The lack of Chinese players in US market will further hinder its 5G deployment, but US restrictions will not stop the growing momentum of Chinese firms,” Cui said.