Two questions need answers ahead of ban on Huawei from mobile networks

Telecom operator community is seeking answers to two questions: First, is there a security issue from the deployment of Huawei network? Second, will more countries ban Huawei from their mobile network without proving the security issue?
Huawei 5G antennaThere is no study that indicates that there will be a security issue from the deployment of Huawei equipment in mobile network. United States, particularly the Donald Trump administration, strongly feels that Huawei could be spying on them — assisting China military.

Some engineers and analysts also reveal that 5G network equipment is more open so that there are chances for vulnerability. Huawei is not the only supplier of 5G network equipment. So, what is their stand on the 5G equipment from Ericsson, Nokia, Samsung and ZTE? Will there be security issues from these telecom equipment makers?

The recent developments indicate that both United States and United Kingdom are supporting a full ban on the use of Huawei network. But several telecom operators including BT and Vodafone feel that removal of Huawei from their mobile networks will be time consuming and costly.

In fact, the U.S. and British foreign ministers agreed to promote the development of “additional trusted 5G solutions,” the U.S. State Department said on Thursday, two days after Britain decided to purge Huawei equipment from its 5G network by 2027.

Secretary of State Michael R. Pompeo spoke with UK Foreign Secretary Dominic Raab today and discussed the UK’s decision to prevent the use of unsecure technology in its 5G networks.

UK ban on telecom network supplier Huawei opens door for rivals such as Ericsson, Nokia, ZTE and Samsung, Supantha Mukherjee at Reuters writes.

Britain’s decision to ban China’s Huawei Technologies from upcoming 5G telecom networks this year and remove its complete gear by 2027 is the latest blow to the leader in the telecom equipment business, the report said.

Ericsson of Sweden and Nokia of Finland can compete with Huawei to provide complete 5G wireless networks. Korea’s Samsung and China’s ZTE play limited role in the 5G network business.

Deployment of Open RAN may reduce dominance of some of the telecom equipment suppliers. Mobile operators are opting for Open RAN, a new and open approach to wireless network architecture, in order to make equipment from different vendors work with each other, enabling engineers at mobile operators to mix and match equipment from various suppliers and improving flexibility and reducing costs.

Huawei’s competitors are unlikely to see an immediate revenue bump as telecom equipment sales cycles typically take more than a year to complete, the report said.

Nokia and Ericsson have struggled financially in recent years and already have a presence in the UK market. Ericsson has been ahead of Nokia in the 5G race globally and has won much of the business in other countries where Huawei has been blocked. Samsung may also get a boost, the report said.

US technology giants including Qualcomm, Oracle, Microsoft, Cisco, Intel and Nvidia hope it will give them a chance to expand their presence in telecom equipment, where they already play a role as suppliers of routers, chips and software.

Companies such as Mavenir, Altiostar and Parallel Wireless, which are creating software for Open RAN and developing partnerships with the big hardware companies, could benefit too.

“The geopolitical uncertainty is providing them with a much needed entry point – it is now up to the Open RAN players to capitalize on this opportunity and show that they are ready for prime time,” said Stefan Pongratz of market research firm Dell’Oro.

There are costs to barring Huawei — the British government has estimated that its decision to purge Huawei equipment will cost the British telecom operators more than 2 billion pounds.

The operators would need to select new vendors to build upcoming networks and also replace existing Huawei equipment.

“Huawei’s infrastructure is considered the most cost-effective, so we will ultimately see an increase in the cost of deploying networks,” said CCS Insight analyst Kester Mann.

“And unfortunately, the upshot of that probably will be eventually that gets passed in some way or the other to the consumer.”

5G networks — aimed at aimed at enabling everything from self-driving cars to connected devices — also feature dense antenna arrays that drive up power consumption on a cell site. Huawei claims that its 5G sites consume 20 percent less power than the industry average.

Both Nokia and Ericsson have said that they have the technology, supply chain capacity and expertise to replace all Huawei equipment in the UK’s networks without any disruption to customers.

“The decision removes the uncertainty that was slowing down investment decisions around the deployment of 5G in the UK,” Ericsson said.

Still, the British government estimates the restrictions and the costs involved could delay rollouts by two to three years.

Huawei accounted for around two-thirds of BT’s mobile network and one-third for Vodafone UK. Three UK, controlled by CK Hutchison Holdings, is solely using Huawei, according to estimates from UBS.

Other European countries, notably Germany, will now be under more pressure to follow the United States, the UK, Australia and others in banning Huawei from 5G.

Many countries, where 5G network development is still in its infancy, may still face a tough choice if they already use Huawei for 4G, given the initial cost of deploying 5G is lower if same supplier provides both 4G and 5G equipment.

When Ericsson got a 5G contract from Bell Canada last month, analysts estimated about $200 million in costs over the next few years for switching from a network built using Huawei gear.

Huawei, which has lost another round in its battle against the U.S.-led campaign against the company, was the world’s biggest maker of telecom networking equipment in 2019, with $42 billion in sales and telecom-related sales outside of China was estimated to be about $20 billion.

While the UK accounts for only around 1 percent of revenue, the latest development matters a great deal to the company.