Global vendors push 5G case

TORON TO • As telecom equipment vendors press for next-generation 5G wireless networks to launch as quickly as possible, China’s Huawei Technologies Ltd. is asserting it deserves its spot as a top supplier despite some security concerns over its technology.

Even though there is not an immediate business case for 5G applications such as autonomous cars, tech vendors including Qualcomm Inc., Huawei Technologies Inc., Ericsson and Nokia Corp. all made a strong push for 5G at the Mobile World Congress in Barcelona last week, Citi Research analyst Dalibor Vavruska wrote in a research note.

Those companies dominated the conference and “are now basically telling the world that 5G is ready this year,” Vavruska said. “Their implied message is that delaying 5G deployment will carry competitive risks, both for companies and countries.”

The push comes despite industry analysts’ reservations about the promise of 5G, at least in the near term. They expect smartphone users will only experience “marginal improvements” when shifting to 5G from 4G, Vavruska noted.

In the research note, Vavruska added that industrial uses such as virtual healthcare or connected cars aren’t yet working seamlessly or ready to be deployed.

Citi sees the vendors’ push for both consumer and industrial 5G usage as an effort to build global economies of scale as fast as possible.

While it’s hard to predict exactly what the demand will be for early-stage technologies — and how much money network operators will charge for the services — vendors are pitching 5G network investments as strategic for both telecom companies and governments. They argue 5G networks with low latency and high capacity will be required when the Internet of Things — a catch-all phrase for everyday devices with computing power — and artificial intelligence take off.

Existing 4G networks already have some capacity issues, according to a separate report released Monday by Opensignal, a mobile analytics company. In a study of 4G download speeds in 77 countries, Opensignal found networks are significantly faster when most people are sleeping and mobile traffic is lowest. Slowdowns during peak periods are “untenable” for applications such as augmented reality or autonomous driving, the report said.

“Even the fastest 4G countries need 5G to counter big drops in speeds at busy times,” Opensignal stated.

“5G will not only provide extremely fast speeds but also a solid bedrock of capacity to even out the consistency issues we are seeing with current 4G networks.”

As the case mounts for 5G networks, Huawei also spent time at last week’s conference advocating for its place in the supply chain. Huawei is already one of the top telecom equipment suppliers in the world, according to a report from researchers at the Dell’oro Group.

Western governments have evaluated Huawei’s equipment for security pitfalls for decades. But the company was thrust into the spotlight in December when its chief financial officer Meng Wanzhou was arrested in Canada to face extradition to the U.S. over accusations she lied about Huawei’s business dealings in Iran. In January, the U.S. charged her with bank and wire fraud.

Meng, who is out on bail in Vancouver, has filed a civil lawsuit against Canada Border Services Agency, the RCMP and the federal government alleging they breached her rights when they detained her at Vancouver airport.