A bipartisan group of U.S. senators has introduced legislation to encourage the development of home-grown 5G networking equipment as an alternative to products from Chinese equipment providers Huawei and ZTE.
The Trump Administration has long been interested in building a national 5G network in order to compete against China, who is poised to dominate 5G deployments in 2020 as a result of initial network infrastructure deployment already in place in 50 cities even prior to the official launch of commercial service, according to ABI Research.
Chinese operators expect to have 143 million subscribers at the end of 2020, representing 70% of total connections worldwide. By contrast, U.S. operators will reach about 28 million subscribers by the end of next year and by 2025 China will amass 1.1 billion 5G subscribers with the U.S. at 318 million. Commercialized rollout of 5G in China started in November of last year.
Huawei is forecast to become the leading commercial provider of 5G, in part because it is heavily subsidized by the Chinese government and because it has already shipped nearly 7 million 5G smartphones in 2019.
To combat Huawei’s presence, and out of fear that using the Chinese vendor’s equipment might compromise U.S. national security, the Trump Administration blacklisted Huawei and its affiliates by adding it to the Bureau of Industry and Security (BIS) Entity List. The move makes it very difficult for U.S. companies to work with Huawei. As a result of the blacklist, Google suspended business with the company meaning any new Huawei smartphones cannot download apps that Google owns such as Google Play Store, Gmail, Google Maps and Youtube.
Encouraging competition
The bipartisan legislation, called the Utilizing Strategic Allied (USA) Telecommunications Act, would encourage competition with Huawei using U.S. software advantages and accelerating development of an open-architecture model to form alternative vendors to enter the market for network components, rather than having Huawei provide the end-to-end equipment for the entire 5G network.
“Every month that the U.S. does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while U.S. and Western companies and workers lose out on market share and jobs,” said Senator Mark R. Warner (D-VA) who serves as vice chairman of the Senate Select Committee on Intelligence, in a statement. “It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose. We need to move beyond observing the problem to providing alternatives for U.S. and foreign network operators.”
The bill by the U.S. senators echoes similar statements recently made by the 5G Action Now advocacy group that more action is needed by the government in the realm of 5G in order to compete against China’s move into the technology.
“When it comes to 5G technology, the decisions we make today will be felt for decades to come,” said Senator Richard Burr (R-NC) and chairman of the Senate Select Committee on Intelligence. “The widespread adoption of 5G has the potential to transform the way we do business, but also carries significant national security risks. Those risks could prove disastrous if Huawei, a company that operates at the behest of the Chinese government, military and intelligence services, is allowed to take over the 5G market unchecked. This legislation will help maintain America’s competitive advantage and protect our national security by encouraging Western competitors to develop innovative, affordable, and secure 5G alternatives.”
While the blacklisting of Huawei has sparked additional interest in other 5G equipment makers — specifically Nokia and Ericsson — and other countries have agreed to not use the Chinese equipment vendor for 5G technology including Japan, Australia and New Zealand, others have not followed suit. The U.K. has not ruled out using Huawei’s 5G equipment for its current or future network after finding no evidence to exclude the company. Germany has also not ruled out using Huawei 5G equipment from its own network with the country stating it must evaluate the conditions on its own. Meanwhile, India, Canada and other countries are still debating whether to use Huawei as a networking vendor for 5G.
