Prepare for the 5G charge
frankfurt/hong kong — China’s Huawei is forging closer commercial ties with big telecom operators across Europe and Asia, putting the company in prime position to lead the global race for nextgeneration 5G networks despite US allegations it poses a security threat.
Huawei’s dominant position in China — set to become the world’s biggest 5G market by far — is welldocumented. However it has also been making in-roads in the rest of world to compete with rivals Ericsson and Nokia in several lucrative markets, including countries that are longstanding US allies.
5G networks, now in the testing stage, will rely on denser arrays of small antennaes and the cloud to offer data speeds up to 50 or 100 times faster than current 4G networks and serve as critical infrastructure for a range of industries.
Deals to start building 5G networks are still largely a year away, but Huawei has signed 25 memorandums of understanding with telecom operators to trial 5G equipment, a Reuters review of company reports and announcements found.
These MoUs — pre-cursors to potential commercial contracts — include agreements with Britain’s BT, Bell Canada, France’s Orange Germany’s Deutsche Telekom and global player Vodafone.
Huawei lags behind Sweden’s Ericsson, with 38 MoUs, and Finland’s Nokia, with 31, according to the data, which does not include deals that have not been made public.
However, the Chinese company’s existing partnerships with operators could give it an extra edge;
existing network footprint is important because operators still need to maintain their legacy... networks and could save money by using the same vendors Stefan Pongratz, Industry analyst at Dell’Oro
as of 2016, Huawei said it had supplied more than half of the 537 4G networks globally and 59 of the 90 4.5G networks — an intermediate step before 5G.
“Existing network footprint is important because operators still need to maintain their legacy... networks and could save money by using the same vendors,” said Stefan Pongratz, a top industry analyst with research firm Dell’Oro.
Huawei also has the home advantage: the firm and smaller, domestic-focused peer ZTE are each guaranteed about a third of China’s 5G network contracts, under Beijing’s policy, while foreign players have to compete for slivers of the market.
By 2025, 1.2 billion people worldwide are set to have access to 5G networks — a third of them in China, according to the GSMA, a global trade group of nearly 800 mobile operators.
There are however potential risks ahead; Huawei, like its rivals, has spent billions of dollars developing 5G network technology, there are no guarantees about when operators around the world will adopt the new technology.
Many cash-strapped operators want to see significant consumer and business demand before allocating capital, something out of Huawei’s control. Some emerging markets have yet to adopt 4G, putting major 5G moves at least a decade off. —