Huawei con­tro­versy opens field for 5G chal­lengers

Cur­rent sit­u­a­tion of­fers op­por­tu­nity to firms like NEC and Sam­sung to shine

Arab News - - Business News - AFP Tokyo

With grow­ing pres­sure to keep China’s Huawei out of 5G net­work devel­op­ment, it could be time for firms like Ja­pan’s NEC and South Korea’s Sam­sung to shine.

Wash­ing­ton has pushed al­lies to bar Huawei, a Chi­nese tele­com gi­ant, from build­ing next-gen­er­a­tion 5G mo­bile net­works, claim­ing its equip­ment can be used to spy for Bei­jing.

Huawei de­nies the charges, but US pres­sure has prompted an about-turn in Bri­tain.

The gov­ern­ment had al­ready pledged to cut the firm out of the most sen­si­tive “core” el­e­ments of 5G that ac­cess per­sonal data, and is now re­port­edly push­ing for plans to end Huawei’s in­volve­ment in Bri­tain’s 5G in­fra­struc­ture by 2023. But ex­clud­ing Huawei is not without chal­lenges, be­cause there are cur­rently only two al­ter­na­tives in Europe for 5G equip­ment such as an­ten­nas and re­lay masts: Fin­land’s Nokia and Swe­den’s Eric­s­son.

Bri­tain has en­cour­aged Wash­ing­ton to form a club of 10 demo­cratic na­tions that could de­velop its own 5G tech­nol­ogy, but there has been lit­tle move­ment so far.

“The vast ma­jor­ity of the com­mer­cial net­works sold in the world come from the big three,” said Syl­vain Che­val­lier, in charge of tele­coms at Bear­ingPoint con­sul­tancy, re­fer­ring to Huawei, Nokia and Eric­s­son. “But a world of three is not good for op­er­a­tors, and if it goes down to two it will be worse still,” he told AFP.

That leaves

a tempt­ing po­ten­tial open­ing for tele­coms firms like Sam­sung and NEC. But build­ing a suc­cess­ful 5G net­work is no sim­ple task.

That is a les­son Sam­sung has al­ready learned. De­spite be­ing a ma­jor player in 3G, it found it­self un­able to com­pete with the big three on 4G and strug­gled to win com­mer­cial con­tracts.

“This has been a chal­lenge for Sam­sung,” said Daryl Schoolar, a mo­bile tech­nol­ogy spe­cial­ist at con­sult­ing group Om­dia. In build­ing its 5G net­work, Sam­sung has so far fo­cused on North Amer­ica and parts of the Asia-Pa­cific re­gion. “So while op­er­a­tors may feel un­cer­tain about Sam­sung Net­works, they are much fur­ther along in the process of be­ing a global pres­ence than NEC,” Schoolar added.

NEC does have some ad­van­tages, in­clud­ing a part­ner­ship in Ja­pan with mo­bile op­er­a­tor Rakuten.

The firms have al­ready co­op­er­ated on a 4G net­work and are now jointly devel­op­ing a 5G sys­tem.

The Ja­panese firm is also a leader on un­der­sea ca­bles, fiber op­tic net­works and — thanks to its af­fil­i­ate Netcracker — lo­gis­tics man­age­ment soft­ware. “Netcracker has a strong pres­ence with op­er­a­tors in Europe, which could be a real en­try point for NEC,” said Stephane Teral, chief tele­coms an­a­lyst at LightCount­ing, a mar­ket re­search firm.

NEC is tightlippe­d about its con­tracts for mo­bile net­works, say­ing only that it is hold­ing fea­si­bil­ity demon­stra­tions for “a num­ber of cus­tomers and we are en­gaged in com­mer­cial dis­cus­sions with oth­ers.”

Bri­tain’s gov­ern­ment has re­port­edly asked both NEC and Sam­sung to take part in demon­stra­tions as it looks to di­ver­sify its 5G op­tions. And on Thurs­day, NEC an­nounced a tie-up with Ja­panese op­er­a­tor NTT in­tended in part to speed up the devel­op­ment of a 5G net­work.

Sam­sung and NEC joined forces 2 years ago and have launched a joint mar­ket­ing team to of­fer 5G prod­ucts to Euro­pean and Asian mar­kets.

Still, the path ahead will be tough, said Schoolar.

“I think it’s a ma­jor chal­lenge for NEC. It re­quires more than ra­dios, it re­quires in­vest­ing in peo­ple who can do sys­tem in­te­gra­tion, sales, cus­tomer sup­port, net­work de­sign and en­gi­neer­ing,” he said.

“Plus NEC will need to build op­er­a­tor trust that they will be there to sup­port them in 5 to 10 years as those 5G net­works evolve.” Wash­ing­ton has backed the use of non­pro­pri­etary tech­nol­ogy like Open RAN in 5G devel­op­ment, hop­ing it will pro­vide an en­try point for US firms.

Such a move would open up op­por­tu­ni­ties for NEC, al­low­ing them to “cre­ate an eco­nomic model that would shake up tra­di­tional equip­ment man­u­fac­tur­ers,” said Che­val­lier.

BACK­GROUND

Wash­ing­ton has pushed al­lies to bar Huawei, a

Chi­nese tele­com gi­ant, from build­ing next-gen­er­a­tion 5G mo­bile net­works, claim­ing its equip­ment can be used to spy for Bei­jing.

Huawei de­nies the charges, but US pres­sure has prompted an about-turn in Bri­tain.

UK has en­cour­aged Wash­ing­ton to form a club of 10 demo­cratic na­tions that could de­velop its own 5G tech­nol­ogy, but there has been lit­tle move­ment so far.

In build­ing its 5G net­work, Sam­sung has so far fo­cused on North Amer­ica and parts of the Asia-Pa­cific re­gion.

NEC does have some ad­van­tages, in­clud­ing a part­ner­ship in Ja­pan with mo­bile op­er­a­tor Rakuten.

On Thurs­day, NEC an­nounced a tie-up with Ja­panese op­er­a­tor NTT in­tended in part to speed up the devel­op­ment of a 5G net­work.

AFP

Cus­tomers look at Huawei smart­phones at a flag­ship store in Shang­hai. Huawei plans to strengthen the brand in its core do­mes­tic mar­ket.

AFP/File

The logo of NEC, Ja­pan’s elec­tron­ics and in­for­ma­tion tech­nol­ogy com­pany, is dis­played at the firm’s head­quar­ters in the cap­i­tal Tokyo.

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