The UK is facing a critical time in its history. The adoption of 5G provides the opportunity for it to look beyond Brexit, and portray itself as a nimble, fast-moving and forward thinking economy. Yet, it is currently caught up in a technological shift in dominance from the west to China, by using Huawei to develop the infrastructure, and throwing up issues around 5G security.
5G is not simply an iterative step up from 4G. According to Wired, it is expected to usher in a fourth industrial revolution. At up to 100 times faster and with considerable latency benefits, it will propel the growth of the internet of things, as well as the ability to manage network traffic. Zero latency will completely change the way we will consider ‘being connected’ on the move. Much more than a consumer impact, 5G will provide a commercial advantage for the economies that adopt it the quickest. It is no surprise that questions have been raised about which provider will take the spoils. Below, I've broken the issue down into five key areas.
1. Why has Huawei become so pivotal in this discussion?
Huawei has made no secret of its desire to be the global leader in 5G. According to Huawei’s own site, the company was pioneering 5G as far back as 2009. And it is this development time, along with the sheer financial clout that Huawei has put behind it, that makes it best placed to deliver it. It is now the world’s largest manufacturer of network equipment.
Huawei’s size and manufacturing capability also provide more subtle benefits. Huawei can offer favourable financing deals, discount its equipment and roll out its networks quicker than anyone else. Taken in context with the realisation that many Western economies are struggling to finance and make profitable their 4G rollout, these add-ons make Huawei a very attractive partner.
2. Where does the concern with Huawei come from?
The fears surrounding Huawei are both political and technological. For the last few decades, the west has been supported by innovation that is primarily developed in the US and Silicon Valley. This has been changing, and Huawei’s 5G dominance provides a bracing reality. A major commercial deployment of Chinese technology could remove the opportunity for US providers to maintain parity both now and in the future. Taken in context with the trade war waged between the US and China, blocking Huawei could work in favour of President Trump (according to the Independent).
Adding to this viewpoint, it is increasingly difficult to separate Chinese companies from the Chinese government. This feature has made many US officials uneasy and led to Huawei being banned from US government contracts back in 2014. Attacks by the chinese state have also shown no signs of waning in recent years according to Reuters. So, despite every attempt to prove its innocence, question marks around Huawei still remain. For many, this question is now about principal. Allowing another power to have control of your sensitive information is "at best naive, at worst irresponsible” according to a well-respected RUSI defence think tank.
3. Will the UK fall behind if it doesn’t use Huawei’s infrastructure?
The US and the UK have by no means acted in the same way regarding Huawei and this has major repercussions. Unlike the US, the UK has been reported by the FT as helping turn Huawei into a global power. It has spent billions of pounds investing in its 4G infrastructure already. In fact, UK operators including Vodafone, EE and Three already purchased Huawei’s 5G infrastructure years before the recent controversy.
This existing investment in Huawei’s infrastructure would make a decision not to use it much more impactful for the UK than the US. Testing and rollout has already been performed using Huawei’s equipment (according to The Guardian). In the event of a ban, the whole process would have to begin again. Nick Read, Vodafone’s chief executive, has warned that excluding Huawei could be “hugely disruptive”. With the UK is already falling behind in its deployment of 4G, the decision would only pile more pressure on the UK's networks.
4. Is there evidence to suggest other countries are stepping ahead?
Being blinkered in what is a global issue could be hugely detrimental to the UK. The UK and the US are not the only players and 5G provides the opportunity for many lesser known economies to catch up. In fact, many countries outside the US and UK have been moving swiftly ahead during this period of inertia. Qatar has already rolled out commercial access and Kuwait, devastated by war only a few decades ago, has already made it possible to sign up for 5G. (You can sign up here for a 500 GB, 1 TB, or 4 TB plan.) Looking further afield, most of South America is set for rollout in 2020 and Indonesia is well on its way following its trial at the Asian Games in 2018. In South Africa, Rain 5G is launched and available now. Russia has also selected Huawei.
Taking this global view into account, it is perhaps not a surprise that many European countries initially showed little or no concern about Huawei’s infrastructure. Norway, Germany, Hungary, Switzerland, Spain and France have all proceeded with Huawei (as shown in RT). In fact, the political pressure from the US has so far only led to Australia and Japan blocking the firm from their 5G networks. But pressure is most certainly heating up following a report by the European commission, which increases its rhetoric when it comes to State-backed cyber threats. Although to this point Huawei has not been directly mentioned, it is by no means a guarantee that the company is in the clear (see CityAM). Yet, in the face of these ongoing rebuttals, Huawei remains resolute. It welcomes the report and reiterates that placing greater spotlight on cyber security as a whole makes it more likely that a common approach will be developed.
5. Are there viable alternatives? What are their limitations?
A review by government secretary Jeremy Wright clearly showed a lack of options in the telecoms supply chain, yet alternatives do exist. According to Shaun Collins, CEO of technology research firm CCS Insight “There are three significant alternatives: Nokia, Ericsson and Samsung Networks.” These alternatives have also often pioneered the first rollouts of 5G. The deployments in Qatar and Kuwait were underpinned by Ericsson’s infrastructure.
The concerns surrounding the alternate options therefore stem from their ability to rollout the technology on the size and scale required. Huawei, as many experts believe, has far superior manufacturing capabilities than the likes of Nokia, Ericsson, and smaller rival Samsung. This would mean that if the US chose an alternative, it would place a huge strain on the alternate manufacturers. Taken in context, it is no surprise that Ericsson’s CEO Borje Ekholm said in February that the debate over Huawei could delay the introduction of 5G in Europe.
It would also be foolish to think that by selecting alternate infrastructure, the concerns around security would be removed. The mere design of 5G makes it susceptible to attacks (for example, in our report, 5G Network Security: Vulnerabilities Old and New, we cover this in detail). If the infrastructure was to be provided by other players, the increased costs are likely to make it incredibly challenging to allocate the funds required to fully secure the network.
Clearly, concern surrounding Huawei is very much an unwanted distraction for the UK. Huawei can do little more to try to allay fears, and the UK cannot afford to dwell while the rest of the world moves swiftly ahead. Whatever the decision, it is likely to heavily impact the UK’s relationship with the world’s two most dominant economies - China and the US - for years to come. The time has come to make a decision.