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Technical tensions : Huawei and 5G

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Amidst geopolitical conflicts and trade wars around the globe, the ‘x’ generation of the 21st century is faced with a seemingly unresolvable issue, a middle ground situation for nations around the world – whether or not to install high-speed, reliable network connections provided by the world’s 5G patent leader, Huawei.

A Chinese telecom hardware and software giant, Huawei Technologies has been doing rounds in controversial news around the globe recently, after being banned by the United States on grounds that Huawei’s 5G will be used by the Chinese Communist Party (CCP) for spying and collecting data through network provision and core traffic services. The fact that Huawei CEO and co-founder Ren Zhengfei has been an active part of the People’s Liberation Army (PLA) and the CCP, fuelled by the ongoing trade war between the United States and China, steered the US Security policy on Huawei ban on account of National cybersecurity concerns. Passed with bipartisan consensus between the Democrats and the Republicans, the “Defending America’s 5G Future Act” would prohibit even the US President from lifting the ban in the future, without explicit approval from Congress.

5G is a revolutionary technology that drastically enhances data analytics, automation, machine-to-machine connectivity and network speed. While an average 4G Network can cater to a population of 2000 per square kilometre, a 5G Network provides the benefits mentioned above to a population of about 2.6 million people per square kilometre. For wide-area networks, a 5G Network can capacitate a traditional base station’s network service by 20 times, while keeping it 3 times smaller than 4G.

Since time immemorial, Huawei has not only been a company with a futuristic vision towards telecom equipment building and network provision but has also been the provider of 3G and 4G networks around the world. Owning 20% of the world’s total 5G technology patents, Huawei runs 50% of the network and equipment provided in the domain. Moreover, Huawei’s market reach is unbeatable even for competitors like Samsung, ZTE and Ericsson, primarily due to Huawei’s low-cost offerings. It’s newest, groundbreaking mobile phone model, the Mate X, is on run to be the first ‘foldable’ mobile phone in the world, competing alongside Samsung’s ‘Galaxy Fold’. A 5G-compatible smartphone, Mate20 X has already flooded Chinese markets, making millions in Yuan on just preorders. Heavily funded by the CCP, Huawei makes extensive investments in Research, Development and Analytics, a lump-sum of $15.1 billion in 2018 alone. As of now, the company owns 40 base station commercial contracts worldwide, 6 of which are in India.

However, since the US sanctions on Huawei entered the global technology market, a conundrum struck at the ‘core’ of the United States’ Five Eyes Intelligence Alliance with the United Kingdom, Canada, Australia and New Zealand. While the US has been clear on its stance, the other four have expressed concerns to varying degrees. Not only did Huawei lose the smartphone market in the US, but also the deal to provide network services to Google, ARM and other States’ firms. As commented by The US President Donald Trump in the 2019 G20 Summit, the only undercut for its sanctions is that Huawei will be able to buy high-tech telecom gear with the United States, equipment which raises no national security concerns.

In light of the States’ tomb-stoning claims on Huawei’s unreliability, the tech company prepped to stick to the rules and stay ahead of any competition. Resultantly, on August 9, 2019, Huawei announced its own Operating System for Huawei devices, in case Google bailed Android support on Huawei devices too. Titled ‘HongMeng OS’, this proprietary Huawei OS is nothing like iOS or Android. Not only is it open-source for app developers, but also features an ecosystem familiar to Android, but smarter and faster. Of course, it will be some time before HongMeng OS becomes a common system developer for mid-range Huawei smartphones.

Being staunch allies of the US, the European Union, under the leadership of Boris Johnson, was quick to halt Huawei’s core service provision in the UK. However, Huawei’s cheap 5G roll-out rates and affordable 5G-enabled sets have doubled the dilemmas for the Brexit-stricken United kingdom. The Huawei CEO, Ren Zhengfei, told Sky News that Britain had a “very important” decision to make about the rollout. He added, “I think they won’t say no to us as long as they go through those rigorous tests and look at it in a serious manner. I think if they do say no, it won’t be to us.” Even though the EU’s skepticism towards China’s Huawei is heavily fuelled by the US statements, not all Huawei footprint was wiped off in the UK. Despite US Secretary of State Mike Pompeo’s warnings that if a country adopts Huawei technology, the US “won’t be able to share” information with them and will scale back operations of other American firms in the UK, not only are the 5G research and trials still underway in Britain, the British the Intelligence and Security Committee (ISC) mentioned that excluding Huawei network services would “lower security standards.”

The response to the US ban on Huawei was diverse. While the UK was still debating the issue, New Zealand and Australia decided to completely ban Huawei’s 5G, while Germany was considering it. However, in August 2019, German officials said that they would not exclude Huawei from 5G network development (reported by the German Business Newspaper, the ‘Handelsblatt’). Other reports suggested that Germany’s security authorities would still investigate whether Huawei posed a threat. On the other hand, the national security concerns of the West were paid no heed to in South-East Asia. Not only did Malaysia, Thailand, Philippines and Indonesia welcome Huawei’s 5G Network roll-outs, but have also been loyal telecom equipment consumers of Huawei for a long time. Even the ASEAN remained unaffected by US claims, ever since the increased dependence of the bloc on Chinese trade and technology. Moreover, Huawei has also invested approximately $800 million to build a factory for 5G roll-not. Not only has the Bolsonaro-led government welcomed Huawei with open arms but has also announced an auction for the 5G Spectrum in Brazil, which is expected to be one of the biggest auctions in the tech-field, worldwide.

India’s version of the Huawei problem is somewhat unique. The Indian Telecom sector is a complex market, dominated by direct-to-consumer services and private investments from wealthy stakeholders, unlike the Chinese telecom policy, which undercuts tech companies’ corporate interests to serve the greater interests of the government. India possesses the second-largest base of internet subscribers in the world (as of December 2018). The Indian telecom industry is an oligopoly market dominated by three players – Bharti Airtel, Vodafone Idea and Reliance Jio. While Bharti Airtel and Vodafone idea have been avid consumers of Huawei equipment for their 3G and 4G Network services, Reliance Jio works on a pan-India partnership with Samsung and aims to continue doing so, even for its 5G plans.

After Huawei appeared on the United States’ Ministry of Commerce blacklist, almost no nation in the world wanted to be caught in the vendetta, much like India. To avoid contention further beyond border disputes and US-China conflicts, the Indian Department of Telecom (DoT) announced that Huawei will not be allowed to indulge in collaboration with local Indian firms. Not only this, but there is also prevailing uncertainty on whether or not Huawei will be invited for India’s upcoming 5G network trials, said Indian telecom minister, Ravi Shankar Prasad. In response to this decision, Beijing threatened reverse sanctions on Indian Firms operating in China. Not only did China actively propagate Huawei’s assistance in uplifting India’s economic and telecommunications scenario, but also hoped that India would take an autonomous, evidence-based decision on its 5G Network model.

Core v/s edge

Source: The Economic Times

To purge the heat, India will finally take up a road trial-tested by the UK and one about to be adopted by many nations in years to come – keeping Huawei equipment strictly non-core, i.e letting network traffic pass through Indian base stations without letting Huawei’s 5G drive the ‘brain’ of the system. In my opinion, not only should this be a ‘universally-recognised’ middle ground, but also a means to prevent global geopolitics from what is being termed as a “Technological Cold War.” The Indian telecom is a market with low profitability, needy of technical partnership. In this light, securing Huawei’s ‘edge equipment’ to reduce deployment costs and establish a consumer base for speedy and reliable 5G network, while assessing Ericsson, Samsung, Nokia and Cisco for ‘core’ (5G Network) trials would be a near win-win situation. Avoiding a huge risk of sanctions from both China and the US is the need of the hour for India, and the country must be vigilant in risk-assessment and muted action.

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