The Strategist

How will Huawei case affect deployment of 5G?

03/04/2019 - 11:45

The Canadian Department of Justice has officially launched the extradition process of Huawei’s financial director Meng Wanzhou, who was detained on suspicion of violating anti-Iranian sanctions. The Office also issued permission for further judicial action against the businesswoman. Date of appearance in court on extradition in the United States is scheduled for March 6. The meeting will be held in the Supreme Court of Vancouver.

Kārlis Dambrāns
Kārlis Dambrāns
The Chinese Foreign Ministry has already protested against the actions of Ottawa. Huawei itself was also disappointed by the Canadian authorities’ decision.

“The accusations of the American side are politically motivated. President of the United States has repeatedly stated that if Mrs. Meng Wanzhou’s case contributed to achievement of a trade agreement between the United States and China, he would interfere in the course of this matter. Nevertheless, the Minister of Justice of Canada decided to issue an appropriate warrant anyway, and we are extremely disappointed with these actions,” the company said in an official statement.

In addition, Huawei noted that the violation imputed to the financial director is not actually a violation in Canada. This means that the Justice Ministry “abused legal procedures” violating the principle of double criminalization, that is, the act must be recognized as illegal in the issuing country and in the host country.

It is also known that Huawei is one of the main pioneers of the fifth generation of network technology. In the current political situation, the deployment of 5G may be at risk.

Future around the corner

The largest annual exhibition of the mobile industry Mobile World Congress 2019 (MWC), which ended in Barcelona, showed that 5G technology has become a new deity of the telecommunications industry and even pressed the “cult of the smartphone”. Thanks to this, the traditional confrontation between Samsung and Huawei faded into the background, this time bringing smartphones with flexible screens to Barcelona.

Why will 5G become one of the world's top technologies in the next few years? The transition to a new technological structure together with the development of artificial intelligence, mass introduction of robots and digitalization of all types of human activity is simply impossible without 5G networks.

At the same time, 5G is not just a new mobile standard. This is a new generation of converged communication, where radio frequency communication is only one of its elements. For example, no 5G network is possible without a quality backbone fiber optics. It is impossible to manage such networks without powerful data centers and artificial intelligence technologies, since 5G means connecting billions of devices. In the 5G concept, everything is connected to the Internet - from a lighting bulb and a smartphone to an aircraft turbine.

If we summarize speeches of telecommunications evangelists and marketers at the MWC 2019, it seems that the bright future has already arrived. Commercial launches of the first 5G networks in the USA, South Korea, Finland, and Japan took place. Some of the already operating base stations of mobile operators are 5G-ready stations. They just need to switch to the new mode of operation.

However, not everything is as smooth as it seems at first glance.

Despite the fact that even small companies can produce telecommunications equipment, only a few large vendors can supply complete solutions for telecom operators in the right amounts and in a short time. These are Ericsson, Nokia and, of course, Huawei.

Moreover, even if we skip Huawei’s claims to be almost a year ahead of the competitors in the field of equipment for 5G networks, this Chinese brand is still the world's largest supplier of telecommunications equipment. Surprisingly, it is now, perhaps, in the most difficult situation in its entire history. The Chinese are now being ousted from the largest and most profitable markets in the world, namely, from the mobile market of the USA and their closest allies.

The US leadership is very well aware of importance of 5G for the country's economy. Moreover, the presidential administration and Donald Trump himself work closely with the Federal Communications Commission and mobile operators, discussing various aspects of 5G deployment.

The more surprising were the discriminatory measures that in fact locked sale of Huawei telecommunications equipment in the United States under rather tense pretexts, such as allegations of corporate espionage.

The investigators even remembered a story of 2014, when T-Mobile USA accused Huawei of trying to find out nuances of the design of the Tappy robot, which was used in T-Mobile to test new smartphones. It should be noted that the conflict itself between the two “economic entities” was settled in court in 2017.

The pretext for imposing such harsh sanctions is rather strange. Perhaps the United States wants to limit the cash flows from American customers to Chinese suppliers. However, telecommunications operators in the United States and other countries are either left or may be left without Huawei equipment. These factors can seriously slow down t launch of networks in these states. Excluding the largest player from the list of suppliers and reducing competition will most likely affect the timing and cost of deploying 5G in the United States.