President Donald Trump wants United States telecom operators to buy 5G network equipment designed and manufactured outside China, Wall Street Journal reported.
Operators such as AT&T, Verizon, T-Mobile and Sprint are in the process of building their 5G mobile network in the United States.
The latest development indicates that telecom network makers such as Ericsson, Samsung and Nokia, and router and switch makers such as Cisco, HPE, Dell Technologies, among others, cannot supply China-made or China-designed 5G network equipment to local operators in the United States.
Several technology companies rely on China to manufacture their telecom equipments
The report said this is part of a 150-day review that started after cyber-security concerns in the United States.
Officials are asking telecom equipment makers if they can develop U.S.-bound hardware including cellular-tower electronics as well as routers and switches, and software outside of China, the WSJ reported.
In May, the Trump administration banned China’s Huawei Technologies from buying vital U.S. technology without special approval. Earlier, United States barred its equipment from U.S. telecom networks on national security grounds.
Huawei has recently admitted that its revenue will not meet its earlier target of $130 billion this year. Huawei is expected to achieve revenue of less than $100 billion. But analysts think that Huawei’s sales will be much lower. Huawei is expecting a revival of its business from 2021.
The WSJ report on Sunday said any executive order calls for only a list of proposed rules and regulations by the 150-day deadline, in October, so any decision could take years to adopt.
5G to cost more
Telecom industry body GSMA earlier said a ban on buying telecoms equipment from Chinese firms would add about 55 billion euros or $62 billion to the cost of 5G networks in Europe and delay the technology by about 18 months, Reuters reported earlier.
The $62 billion estimate reflects the additional costs implied by a full ban on purchases from Huawei and ZTE for the roll out of 5G networks in Europe.
The two Chinese vendors have a combined market share in the European Union of more than 40 percent.
“Half of this additional cost would be due to European operators being impacted by higher input costs following significant loss of competition in the mobile equipment market,” the GSMA report said.
“Additionally, operators would need to replace existing infrastructure before implementing 5G upgrades.”
Nokia said that was not true. “We offer a technical solution whereby we can overlay our 5G equipment on top of another vendor’s 4G gear. This solution could reduce the cost and complexity of vendor changes,” Nokia spokesman Eric Mangan said.
A ban on telecom equipment from China would also delay the deployment by 18 months of 5G technology, which will be used in areas ranging from self-driving cars to health and logistics.