Despite the best efforts and subsequent ire of the United States, the British government recently announced it would allow Chinese tech firm Huawei to play a limited “non-core” role in building the UK’s 5G networks. The question is: how real are the threats posed by the Chinese company?
While Huawei has been labeled a “high-risk vendor”, British cybersecurity experts believe they can manage the perceived security threats. But with US officials, who had been calling for a total ban, insisting there is “no safe option” for Huawei to control any part of any network, how real are the threats allegedly posed by the company? And what are the alternatives to its technology?
While spying allegations have continually dogged Huawei, so-called “backdoors” or surveillance spyware have never been discovered on any Huawei device. For many, however, security issues center around potential, as they point to the company’s close ties with the Chinese government. Countries such as Australia, New Zealand and Japan have banned Huawei equipment from 5G rollouts on the basis that it is simply one software update away from being compromised. For Jean-François Dufour, director of DCA Chine Analyse, a French consultancy focusing on Chinese industry,
“The principle threat posed by Huawei’s 5G tech is not so much spying as the possibility of severe service disruption. This is especially pertinent given that 5G-dependent systems will become increasingly ubiquitous going forwards.”
Filling the Void
Enabling everything from super-fast streaming to smart manufacturing, 5G networks are widely regarded as essential to national development. Stricter legislation and guidelines governing the use of Huawei’s 5G technology should, therefore, present the Chinese company’s competitors with a great opportunity. Filling the Huawei void is, however, a nuanced proposition.
Factors such as huge investment costs, a fickle market, poor policymaking and cash-strapped clients, coupled with the inexorable rise of Huawei – itself backed by virtually limitless Chinese state financing – have seen the number of global telecoms equipment suppliers decline in recent decades. While companies such as Samsung and Cisco Systems are still active, prospective 5G operators are more or less beholden to a trio of very large vendors – namely Huawei, Sweden’s Ericsson and Finland’s Nokia. There is simply no US-based Huawei counterpart.
Huawei, despite its difficulties, is still a more than capable competitor, with many European phone companies regarding its base stations, switches and routers as technologically superior. The company is widely seen as providing the most advanced 5G for the super-fast data transfers required for autonomous vehicles and cutting edge industrial robots. For Anders Elgemyr, a telecoms analyst with investment bank Carlsquare,
“Huawei is brilliant at technological development and is currently ahead of Ericsson and Nokia in several key areas. I fully expect Huawei to fight back against restrictive legislation by aggressively targeting markets in Asia, South America, the Middle East and Africa.”
For Jean-François Dufour,
“Nokia and Ericsson are serious alternatives to Huawei. This is evidenced by the fact that the US is considering buying a supportive stake in one or both. Nevertheless, the Chinese company benefits from a starting cost and technology advantage as it has taken the lead in 5G.”
According to a report from the London-based GSMA mobile network organization, fully excluding Huawei and ZTE from 5G would raise radio-access network costs for European phone companies by 40%, or 55 billion euros.
Looking further ahead, other technological developments may disrupt the 5G tech space further. Vodafone, the world’s second largest mobile network operator, has recently begun testing its so-called Open Radio Access Networks (OpenRAN) system in the UK, with the aim of standardizing the design and functionality of 5G hardware and software and opening up the market to more vendors.
The ongoing shift to from hardware to cloud-based, software-defined infrastructure in the telecoms industry – a process known as “virtualization” – is also a disruptive trend, with the potential to significantly boost interoperability in telecoms systems.