Why 5G is the new global arms race
By Edwin Yapp March 6, 2019
- 5G no longer merely a tech race; it’s the way governments control the future
- Good that Malaysia taking measured approach to 5G security issues
IT’S been close to two decades since I went for my first Mobile World Congress (MWC), then known as the 3GSM Mobile Congress. Back then, it was held at the Palais des Festivals, Cannes, the famed venue which hosts the annual Cannes Film Festival.
The venue for MWC shifted to the current Fira de Barcelona, Spain in 2006 as the Palais could not host more than 30,000 people. Back then, the five-day conference was graced only by the media, hard-core telco industry executives and a handful of policy and government-type figures, mainly there to talk about regulation, policy and compliance issues.
Most of the time, the media reported very mundane updates with the occasional hype when devices were launched. Although the past few years have seen the likes of Samsung Electronics Co Ltd, Huawei Technologies Co Ltd and others exhibiting their wares, the stories that emerged were generally confined to the business and tech realms and never intersected with global geopolitics.
But this year’s recently concluded MWC bucked that trend, and I wish I had been there to cover it all. But alas that did not happen and so, let me comment from afar.
Last week at the Fira, a high-powered delegation from the United States flew in and had one agenda in mind: To convince the world that Huawei is a bad actor in the new era that is about to dawn upon us – the world of fifth generation (5G) mobile communications.
A delegation led by Robert Strayer, the US-State Department’s head of cyber-security, told reporters at MWC 2019 that Huawei equipment is “potentially compromised” by the Chinese government but offered no specific evidence, reports Fortune news portal.
Strayer also claimed that Huawei's 5G infrastructure puts the US and its allies at risk of Chinese spying, calling the company “duplicitous and deceitful.”
This came off the back of US Vice President Mike Pence telling delegates at the Munich Security Summit in Germany on Feb 16 that “Chinese law requires them [Huawei] to provide Beijing’s vast security apparatus with access to any data that touches their networks or equipment.”
Huawei is not taking this lying down. In a bid to defend itself, the company – a major sponsor of MWC for many years and a heavyweight member of the GSMA, a lobby group comprising some 750 mobile operators and vendors worldwide – launched a charm offensive PR blitz against United States’ allegations.
Beginning Feb 17, a week before MWC 2019 kicked off, the normally media-shy, reclusive founder and CEO of Huawei, Ren Zhengfei went on the BBC in an exclusive interview to unequivocally deny that the 32-year-old company he founded was involved in any form of spying on behalf of Beijing.
"The Chinese government has already clearly said that it won't install any backdoors. And we won't install backdoors either,” he said. “We're not going to risk the disgust of our country and of our customers all over the world, because of something like this.
"Our company will never undertake any spying activities. If we have any such actions, then I'll shut the company down," he stressed.
Ren also claimed that what Washington was doing will not “crush Huawei,” and that the United States does not represent the world but only a part of the world. “If the lights go out in the West, the East will still shine. And if the North goes dark, there is still the South.”
“The world cannot leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit.”
A week later at MWC, Huawei’s rotating chairman Guo Ping doubled down on the rhetoric and launched a broadside against its detractors, particularly accusing the United States of practising hypocrisy.
“Prism, prism on the wall. Who's the most trustworthy of them all?,” he sarcastically said, in clear reference to the controversial National Security Agency (NSA)-led programme that ostensibly collects Internet data from various US-based Internet companies.
Washington however continues to take a combative stance towards Huawei, with its secretary of state Mike Pompeo saying on March 1 that the US may evaluate ties with countries that use Huawei equipment in national 5G networks.
Meanwhile, Vodafone Group Plc’s Nick Read remained unconvinced that banning Huawei is the best course of action to address the ongoing objections to the company.
The CEO of the world’s second largest mobile network by subscribers, said it would be “very very expensive" for operators and consumers if companies were forced to swap their Huawei equipment in favour of competitors’ gear, particularly in Europe, as the United States does not have any issue “because they don't put Huawei equipment in.”
“I would at this stage prefer to be working with governments and securities on a national basis and making sure we have a fact-based conversation,” he said.
And only yesterday (March 5), the CEO of Cisco Systems Inc Chuck Robbins suggested that this Huawei 5G debacle may be overblown.
What’s the real issue?
Aside from the made-for-popcorn geopolitics drama unfolding, what’s really at stake here?
The talk of 5G is always centred on its nominal working speeds of up to 1Gbps, peaking at 10Gbps. Another much-vaunted specification is its latency – the time it takes for a signal to make the round trip between the edge of the network and end devices such as a sensor or phone.
5G boasts of being able to bring latency to below one millisecond, which is 10-20 times lower than what’s doable in 4G today.
But the real power of 5G isn’t just in these figures but rather in its ability, ubiquity and pervasiveness. While 4G brought increased speed of access to the consumer, 5G is able to massively connect not only humans together but potentially thousands and thousands of machines together. And it can do so virtually anywhere and anytime.
This means that not only smartphones will connect to 5G networks but everything with an electronic circuit could potentially be connected.
In a recent note by venture capital consultant, CB Insights identified five verticals which it said would be initially disrupted. They are:
- Healthcare: Wearables health monitoring and preventive technology;
- Advanced manufacturing: Augmented reality, the Internet of Things (IoT) and machine learning;
- Automotive: Autonomous and connected vehicles, and advanced transportation;
- Retail: Store analytics, visual recognition-based shelf and stock monitoring; and
- Entertainment: Ultra high definition streaming and content delivery networks.
The use cases for 5G are growing and while it will take several more years for more applications and services to grow, it’s understandable why the United States remains worried over what Huawei as a company could potentially do.
As Counterpoint Research research director Neil Shah told me in an email, Huawei is the only vendor which is building chipsets, gateways, network equipment and software/cloud middleware. And it’s able to offer an attractive 5G bundled solution, which competitors are not able to offer, he added.
“This has been Huawei’s approach with 5G – to lead with a complete portfolio of solutions and some key intellectual property to differentiate and make a first mover’s advantage,” he argued.
Coupled with this is its strategy of not only providing the technology but its ability to build an ecosystem around its products and services.
Shah said in addition to providing 5G network gear, Huawei has been reaching out to enterprises, especially SMEs and network operators, and enabling them with digital transformation efforts.
“For example in Malaysia, it is looking to grow the connected enterprise, IoT, handset devices, security, network management and cloud-based solutions.
“It has also been investing in talent and working with universities and sponsoring students,” he argued. “In short, Huawei has deeply embedded itself across different opportunities in every country it’s operating in, and is quite formidable compared to its rivals.”
Because Huawei claims to be ahead of the rest of the field and because it’s already an acknowledged leader in 5G, fears are then compounded.
Should Huawei end up controlling the roadmap of 5G going forward and be allowed to flood the world with its gear, then the United States risks losing out not only technologically but also geo-politically to China.
And I suspect for Washington, the pervasiveness of 5G and how much one company can potentially control is the antithesis to the fact that it’s supposed to be the world’s no 1 superpower, which must dictate terms rather than be dictated to.
This is why I agree with David Sanger, the chief Washington and national security correspondent for The New York Times, who suggested in his podcast on Feb 25 (4mins to 7mins) that 5G is the new arms race, akin to how it was in the 1960s, when the United States and the USSR fought for dominance in the Cold War era.
What can be done
Malaysia’s prime minister Mahathir Mohamad has said that up to now, there isn’t any concrete evidence yet against the Shenzhen-based vendor. He has directed Malaysia’s industry regulator, the Malaysian Communications and Multimedia Commission (MCMC) to form a taskforce to investigate the matter and the report is expected to be finalised by this year.
So is banning Huawei the way to go? I confess I don’t have the answer to that as we on the sidelines can only glean so much and are not privy to the intricacies of what’s actually in Huawei’s gear.
What I can argue is that banning Huawei will certainly not help any regulator or government get to the bottom of things.
Instead of banning them, perhaps a better solution is to openly scrutinise its gear in the most exhaustive way possible, something Sanger further noted in his podcast on Feb 25 (18 mins onwards).
Huawei seems opened to this idea. A week after MWC 2019, the company opened a cyber security centre in Brussels, Belgium and invited western governments and customer to test its source code, software and product solutions, reports Reuters.
Meanwhile, my sense is that it’s a good thing that the MCMC isn’t having a knee-jerk reaction to this situation, preferring to take a measured approach and its time to investigate. After all, 5G is realistically not even an infant yet – more like a foetus – and isn’t going to arrive on our shores anytime soon despite vendors and operators going into trial phases with each other.
We in the press now look forward to the report being revealed – and we hope it’ll be revealed to the public – in due time and perhaps then, we can better judge the situation.
Only after all the facts are in should a decision be made.