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Huawei and the global race for 5G | #espionage | #surveillance | #ceo | #businesssecurity | #


There is a global race for 5G, and what this technology entails, and the Chinese company Huawei is in pole position. 5G is not just the new (fifth) generation of mobile network technology. It is going to be crucial to the new information and communication boom being driven by the Internet of Things (machine-to-machine interaction) and artificial intelligence (AI), based on human-generated data, but also, and increasingly, on the data produced by machines themselves, both in themselves and in their learning processes, including so-called synthetic data.

5G communication will be highly strategic in all kinds of sectors, starting with the automotive industry. That is why the US administration, under Donald Trump – but also backed by a broad political consensus within the US – has declared a war on Huawei that goes beyond 5G. But it will be a tough one, because the battleground is planetary.

The United States is lagging behind in the development of this technology. It does not have a major company offering 5G transmission equipment and is trying to play for time. It is even pushing for a US acquisition of the Swedish company Ericsson or the Finnish company Nokia, which do have this technology, or at least subsidies, which may require the intervention of the European Union or European capital. It fears Chinese domination of 5G through companies such as Huawei (there are others, such as ZTE), as part of a general race for technological supremacy. It also fears the security risks: Huawei could be legally obliged by the Chinese government to hand over the data that goes through its networks. The United States, in other words, is not driven by direct industrial interests but by a quest to stymie China’s development of this technology on which so many critical systems rely.

The United States and its grip on the rest of the world

The Trump Administration has not only stopped Huawei from deploying 5G on its own soil – where, unlike other countries, this brand of 4G mobile phones is virtually non-existent – but it has also put pressure on its allies in Europe and the Pacific to follow this precautionary approach. It has, moreover, forced Google to stop supplying essential components of its popular Android mobile operating system to Huawei and some other Chinese companies, which could do them serious damage. Japan has blocked the use of Huawei equipment for its 5G network, as have Australia and New Zealand, and some European allies (Denmark has not banned it, but its main telecoms company TDC has pushed it aside; the same applies in Norway). The United Kingdom, not insignificantly – being part of the ‘Five Eyes’ intelligence alliance between Australia, Canada, New Zealand, the United Kingdom and the United States – has, however, decided to use Huawei supplies, except when it comes to core components. Britain’s supposedly excellent certification and intelligence services did not manage to find any proof of Huawei’s systems having a “back door” for espionage or sabotage.

The European Commission, meanwhile, has recommended that EU member states exclude “high-risk” suppliers from their networks, albeit without mentioning Huawei or China. Europe, as already mentioned, has two companies – Nokia of Finland and Ericsson of Sweden – capable of manufacturing equipment for 5G networks, and competing with Huawei, although at a higher cost. South Korea’s Samsung is also a contender. By not reacting, the European Union, as such, is once again losing a technological race, not a race for networks deployed. The European Commission now intends to focus, and not to lose the next race, towards 6G.

Huawei and other Chinese companies have several competitive advantages. For one, they invest more in research and development, and manufacture more cheaply (thanks to public subsidies). But, more importantly, they have a domestic market that neither the US nor the Europeans can count on.

Added to this are the markets where Huawei already has a strong presence in 4G, and where it is likely to achieve the same with 5G, such as in Africa, Asia and Latin America, where both demographic and economic growth is the highest. And this is what Beijing and Huawei are interested in in the long run.

Forecasts by the United Nations and other institutions suggest that the world’s population will increase from the current 7.7 billion to 9.7 billion in 2050, with half of this growth occurring in nine countries: India, Nigeria, Pakistan, the Democratic Republic of Congo, Ethiopia, Tanzania, Indonesia, Egypt and the United States (which will have less than 500 million inhabitants), while the population of Europe will decline. Translating this into connection points, into connectivity, is one of the priorities behind their approach.

In Asia, Huawei is dominating the beginnings of 5G (except in Japan). In India, the world’s second largest internet market (the first being China itself), and Beijing’s geopolitical rival, Huawei has been given the green light to proceed with 5G trials.

Africa is starting to make progress in this area, but sub-Saharan Africa is not yet ready. Commercialisation of the 5G network announced by Rain and Huawei has begun in South Africa, but on a very limited basis. In Nigeria, MTN has started trials, and expects it to be up and running in some cities later this year. A report by GSMA (which represents the interests of mobile operators worldwide) indicates that only seven African countries are likely to have 5G by 2025, as the existing networks are capable of supporting current needs in most of the region. There is, in fact, already an excess of 4G capacity in relation to affordability.

Huawei is very well established in the Middle East and North Africa region, where those advancing the fastest, not surprisingly given their energy resources – and to which China is increasingly turning – are the Gulf countries. Just last year, Saudi Arabia, a US ally, signed an ‘Aspirational Project’ with Huawei for the modernisation of its current systems and the construction of a 5G network.

In Latin America, the drive for 5G deployment in 2021 and 2022 is headed by Mexico and Brazil, followed by Colombia, Chile and Argentina. The region, where 380 million people do not use the internet, is lagging behind somewhat in this regard, but Huawei is very much present there, something that is not escaping the United States’ attention. Whereas, in Spain, a major company like Telefónica is reducing its dependence on Huawei gear when it comes to 5G, in Latin America, the same company is going to make more intensive use of it, given the commitments it has made and the difference in costs.

While it may inflict some damage on Huawei and China, the United States has got itself into a tug of war that it could lose on a global scale, not least given the strength of the Chinese market alone and the higher level of demographic and economic growth in that part of the world. The current Trump administration may have misread the times and the scales.



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