I just got off the telephone with a contact I had made at Huawei a couple of months ago at their Shanghai Advanced Intelligence event. I wanted to get his take on how the new Huawei mobile phone and other new hardware is faring.
It is quite odd that the vision of China, here in the United States, is so different than that of the rest of the world. A few columns ago I had a chat with a colleague in the Netherlands. It was quite enlightening and I received a very good picture of what they think of the United States.
In today’s conversation, I gleaned a similar picture of what China thinks of us. And, it varies depending upon whether one talks with the common population or with their tech leaders.
The average Chinese citizen does not think much of the United States at present. That is no surprise, considering what our leaders have been doing to them. At first, in the tech sector, there was quite a bit of worry about losing the “goose that lays the golden egg” – America. However, as time, and the shock of what was going on passed, it became apparent that the Trump Administration was going to stay the course. More reasonable heads in Congress were not going to prevail for the time being. So, the tech sector in China regrouped, marshalled its resources and forged ahead in the changing landscape.
I have discussed this quite thoroughly in past missives – what Huawei is doing on a global scale. Much to the dismay of the Administration, the call for a global ban on buying Huawei equipment, or even selling components to the company, did not work out anywhere close what it imagined.
More proof of how Huawei is adapting is this new Huawei smartphone, the Mate 30 Pro. My, how quickly Huawei managed to source components from sources other than the United States! And, in the last couple of days, Huawei announced it was going to relocate its Silicon Valley business unit to Canada. More lost jobs and I am willing to bet this hardly gets a casual backwards glance from Trump since he is not a fan of Silicon Valley anyway.
Did the powers-that-be in this country really expect Huawei to just shrivel up and go away? Sure, the United States represented a significant market for Huawei, and China in general – both import and export. However, this sans-American hardware smartphone illustrates just how nimble Huawei is in a global market. This is the second product made using international parts suppliers (the first were new 5G base stations that do not contain components from American suppliers. And, they perform 30 percent faster than those with U.S.-made parts). Have we forgotten how industrious the Pacific Rim can be?
The jury is still out on the software side of smartphones. Huawei is developing its own version of Android. How successful that will be is still up for debate. China seems to think it will not be a big deterrent in most of the world but they admit it might be an issue in western markets. Still, it is likely that Google will be back on track with Huawei in the not too distant future. The wild card is, who will be in office in 2020.
And, even if we have another four years of this administration, there are rumblings that the detrimental effects for another four years might, finally, turn enough Trump bobbleheads away from his destructive policies and undo much of this.
It is a global economy. The present administration seems not to understand that. So far, this “we are the champions” mentality has failed, miserably. It also seems the more White House policies fail, the more irritated, hence retributive, the President becomes.
The sad state is that the longer this lasts, the more distance gets put between the United States and the rest of the world, including long-time friends and allies. And, the more the rest of the world is forced to turn away from the United States, the worse it will be; not only for technology, but for world-wide integration of 5G and other technologies.
Has Acting Director of the Office of Management and Budget Russell Vought gone off the deep end? Does he realize he is committing blasphemy in this political environment?
As predictable as it is to expect the president to fire anybody who disagrees with him, I am waiting to see how long it takes for the president to boot Vought. Why? Because he came out with a statement arguing that the ban on Huawei should be delayed for two years. His reasoning is simple. The United States cannot ban them without losing a lot of ground in the wireless technology arena. We cannot replace them at the drop of a hat.
Wow! Perhaps this is one brave soul’s attempt to gain some time to see if this administration gets recycled in the next election and repopulates the Washington landscape with cooler heads. Oddly, I have not heard much more about this since Vought made this statement.
Vought argued in favor of delaying the ban because there really is no replacement for Huawei’s technology. They are the largest and most advanced 5G technology provider in the world.
Vought is on the clock. Rules signed into law last year are to be officially introduced in 2020. These laws would place a ban on any government funds being used to purchase Huawei products, services or components.
Vought makes the case that this knee-jerk reaction, by the administration, would significantly reduce the number of vendors available for government agencies to work with – much the same as the Huawei argument, while they were still trying to work with the White House. It does not take a rocket scientist to see that this will have a significant effect on 5G.
The director’s argument is not an unfamiliar one. Another voice for moderation came from Treasury Secretary Steven Mnuchin, who said that security and trade are separate issues and should not be lumped together in the same basket. His position is that security issues will be “resolved one way or another” and the trade issue should be a different discussion.
For some time now, many other voices from a variety of vectors, have warned that aggressive stances against Huawei, and China in general, will do more damage, to the emerging wireless technology market, than the situation it is designed to solve. It will decrease competition for contracts in the wireless space, pushing up component costs and, subsequently, peripheral costs, while lowering the quality of service offered.
At the recent 5G World 2019 event in London, UK Secretary for DCMS Jeremy Wright did a tap dance around the Huawei case, implying that U.S, actions are making it difficult for other countries to move forward with 5G deployments. However, he stopped short of agreeing, or disagreeing, with the U.S. stance. U.S. allies are trying to tread lightly around this issue. However, the bottom line is that they have to do what is best for them.
Another issue is that, presently, the only real competition to Huawei is Ericsson, Nokia and Cisco. Unfortunately, Cisco is dealing with its own security issues in some of its products. I believe Ericsson will have trouble ramping up. That leaves Nokia as the dominate supplier.
One can see the writing on the wall when it comes to vendors stepping up. I highly doubt these players will feel sorry for the United States and keep prices under control. Besides, who knows if Trump, in one of his fits of anger, will turn on them for one reason or another?
It seems that lately, concerns in Washington are growing that the administration is doing is not in our best interests. Are some people waking up, finally?
On the other hand, there still seems to be little concern from the White House of the impact to private industry. Complaints from rural telcos, and cries from organizations where Huawei is an important customer, still fall on deaf ears. The administration seems to be willing to sacrifice any number of pawns with its unrelenting ire to punish the Chinese – warranted or not.
In the end, we should not be surprised at the inconsistency and hypocrisy coming out of the White House. As this drama continues to unfold, who will end up paying for it? The consumer, of course. Not only in higher prices, but also in the level of technology. Huawei, as I mentioned earlier, is the undisputed leader in 5G technology.
Other countries have, other than trivially or superficially, refused to buckle under Trump and his pressure to dump Huawei. In addition, while America may be one heck of a market, 5G is global and if the United States threatens, or dumps, everyone in the Huawei ecosystem, we are going to be a nation of lonely vendors and users falling way behind in the next generation of the wireless evolution.
There was such a ruckus made back in 2018 about winning the race to 5G. I have always dismissed that race hype and, in the end, it was just that. However, if one wants something new to spin, how about dialog around keeping that “first place” some claim we won. Huawei may be taking some hits. However, when all is said and done, the United States will be the one on the receiving end of the economic and technological blows.
Even as the United States attempts to revive trade talks with Beijing, President Donald Trump signed an executive order yesterday securing the information and communications technology and services supply chain, which effectively banned the importation of telecom equipment from Huawei Technologies, although it did not name the Chinese telecom giant.
“President Trump’s decision sends a clear message that the U.S. will do what it takes to secure our communications networks,” FCC Commissioner Brendan Carr. “The Executive Order will help ensure that our foreign adversaries do not compromise the security of our networks or undermine our core values, including our freedom from unlawful surveillance and respect for intellectual property. I look forward to continuing to work with all stakeholders to protect the security of our networks.”
The order was necessary, the president said, because “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people.”
As a result, also on Wednesday, the U.S. Commerce Department added Huawei and 70 affiliates to its “Entity List,” which bans them from buying parts from U.S. companies without government approval.
U.S. Senator Roger Wicker, R-Miss., chairman of the Senate Committee on Commerce, Science, and Transportation, applauded the placement of the Chinese telecom equipment manufacturer on the Entity List.
“This is a necessary step to prevent the use of communications equipment that poses a threat to the United States. As chairman of the Senate Commerce Committee, I stand ready to work with the administration and stakeholders to protect our national security and win the race to 5G,” Wicker said in a prepared text.
Commerce Secretary Wilbur Ross said on Fox News that the move was based on the increased connectivity 5G will bring. “We’re moving into a 5G environment, which will connect everything to everything, the so-called Internet of Things. So as everything becomes interconnected it creates more risk because if someone does something untoward to those systems it could disrupt everything,” he said.
Trump’s executive order said that although an open investment climate is good for the economy, “such openness must be balanced by the need to protect our country against critical national security threats.”
A few days ago, AT&T chief executive Randall Stephenson said that China is not beating the United States on 5G — yet. According to Stephenson, Chinese 5G networks remain in trial stages, he said at an event hosted by the Economic Club of Washington, D.C. This, perhaps, to allay the hand-wringing from the Trump administration, and policymakers, about America’s ability to compete with China in the 5G space.
However, a few days before that, China announced that The Hongqiao Railway Station in Shanghai China, one of Asia’s biggest traffic hubs, has launched a 5G network using Huawei’s 5G digital indoor system that will allow passengers to experience data speeds, up to, 100 times faster compared to LTE. Hmmm… we must not be reading the same news bytes or drinking the same Kool-Aid.
There is some interesting reading in all of this.
AT&T claims to have 5G up and running in dozen markets. However, it seems like an empty claim without phones. To be fair, China does not have any phones either. So, will the winner of the 5G race be the one who has phones first? That could be another one of the many bogus claims to have won the 5G race.
Essentially, without handsets, systems are just taking up space, here, there, anywhere. Stephenson claiming we are ahead, behind, even, whatever, is really just smack talk against China.
What makes all of this even worse is AT&T’s claims to have been the first in 5G late last year. It was a hollow victory, if it was a victory at all. As well, they tried to pass off some chicanery in 4G as 5G (5GE and 5G+). At this point, I have a hard time believing anything they say as being other than embellishment. This latest statement by Stephenson takes even more credibility away.
Why does this matter? Because this is one of the big problems facing the wireless industry, today, and why so many consumers are unaffected by 5G. Misstatements, embellishments, ignorant statements, or even outright lies make it that much harder to buy into the technology and its benefits. A chief executive should know better.
There are warning signs about all this that are beginning to bubble up. However, it seems that the companies on the edge of wireless do not believe the signs or are just pushing ahead for fear of losing momentum. Lately, there has been noise around companies taking a hard look at their outlays for 5G in light of some of the economic data that has surfaced.
For example, while only one segment of 5G, smartphones are seeing some serious speedbumps, relatively speaking. 2018 saw, for the first time, negative growth in smartphones. Granted, the percentage was small, but the implications are huge. As well, the introduction of the over $1000 phones did not receive the warm welcome that was predicted.
There are other signs, as well. Sluggish government action to provide the necessary framework to advance 5G as quickly as some deem necessary, particularly at the local levels where permits are often slow in coming.
Then there is the indoor deployment segment. Carriers and others still have no real methodology to deploy indoor 5G networks that can meet the needs of users in crowded, high-density areas where thousands of people, simultaneously, want to use the network.
Sports venues have provided some data for such environments but that may, or may not, play forward to 5G networks without hiccups. The theory is there, but the use cases have yet to be implemented. Moreover, as one knows, all too well, there is that adage, which says anything that can go wrong, will.
Next, take the U.S.’s stance on Huawei. It has failed in its attempts to derail Huawei, worldwide. Just today, across the Atlantic, Andrus Ansip, European Commissioner for Digital Single Market, is suggesting the Commission resist an outright ban across the bloc.
For the United States, this is pretty much the worst-case scenario. Our political influence and economic power has been undermined and the United States’ belief in its own influence has clearly been over-estimated. That is just another nail in the U.S. Huawei-ban coffin.
Whether we like it or not, Huawei is the leading company producing the necessary 5G network components. The U.S. government’s ban does not bode well for unimpeded 5G progress here, even with other vendors stepping in to fill the void.
Since nobody else is on board with the Huawei ban, they are all moving forward without being hamstrung, widening the 5G gap between the United States and the rest of the world. I have discussed the Huawei situation in past missives so I will not go into it here.
Now, circling back to the types of statements made by industry leaders. The fact is that 5G is far from a done deal, anywhere. There are chinks in the armor. It is fraught with trials and tribulations – some technical, some economic, some political, some geographic, some financial, some perceived, and some imagined. Pile on top of that the huge pool of embellishment, almost truths, wishful thinking, Kool-Aid drinking, and the cold, hard truth is that we have a long hard road ahead before we can breathe a sigh of relief and 5G hits its stride.
Statements like those by Stephenson are, IMHO, just embarrassing.
The delegation sent by the Trump Administration to MWC19 Barcelona to plead the case for cybersecurity fears against Huawei was probably on a fool’s errand. No one goes to this mecca of wireless dreams for a reality check. The gathering, formerly known as the Mobile World Congress, is all about the wow factor with gee-whiz items such as robot mowers, 3D body scans, virtual reality, connected cars, car-racing games, flight simulators, drones and internet-connected kegs. And, in the middle of all, the largest booth belonging to Huawei.
Huawei’s rotating chairman Guo Ping mentioned the cybersecurity concerns about the company’s 5G equipment, in a keynote speech, but he spoke more about the OEM’s success. It is the first to begin a large scale roll out of 5G equipment, which provides data speeds of 14 gigs per second in a single sector, using 100 megahertz of spectrum.
The company is working with the industry on cybersecurity, holding forums and agreeing to joint initiatives with industry organizations. “Huawei is the world’s one and only telecom equipment vendor that is subject to and passes inspections against the highest-level standards. This ensures Huawei can create more secure and trustworthy products and solutions for its customers.”
The U.S.-led campaign against Huawei gained no traction in Barcelona, according to The New York Times. The U.S. delegation’s response to Ping’s speech was a “hastily organized” press conference, which was held in Spain’s booth, and was devoid of any new evidence again Huawei, the newspaper reported.
Even President Trump seemed to back away from his opposition to Huawei on Feb. 21, tweeting “I want the United States to win through competition, not by blocking out currently more advanced technologies.”
In fact, Huawei used the event to gain steam, announcing a number of carrier agreements. On the eve of MWC19, it was announced that it will provide Switzerland’s first 5G network, which will go commercial in March, and it will be the first to test 5G in Iceland. Huawei then used the event to announce signed agreements to provide 5G networks in South Africa, Monaco, and the Kingdom of Bahrain.
Before MWC19, the momentum was clearly going Huawei’s way. The United Kingdom has refused to completely ban Huawei equipment from its networks, according to a report in the Financial Times, saying its security people can handle the threat through testing in special laboratories. As of Feb. 19, Nikkei reported that Germany will likely not band Huawei from participating in its 5G network.
Additionally, the $100 billion company has gear installed across Africa, South America, Russia and the Middle East. And India has reversed its earlier position, saying it won’t ban Huawei 5G equipment, according to the Economic Times.
Fears of Huawei Remain
Nevertheless, the United States and other countries fear that Huawei is capable of installing backdoors in its wireless networks that can funnel information back to Beijing. And the Chinese appear quite willing to harvest that information. A few years ago, in one of its five-year plans, the Chinese government openly admitted that it wanted to dominate the world’s telecom equipment supply, and it would support its companies to do that. Not coincidently, the Chinese government funds Huawei and ZTE.
A source with firsthand knowledge of the innerworkings of Huawei’s communications equipment told eDigest that the United States is not fearmongering in the case of China. He did not agree with the UK security assessment, saying the security hazard represented by Huawei is not a static risk, but a continuous, volatile threat that changes on a daily basis.
Some have listened to the warnings of the United States. Japan, New Zealand and Australia are all in the win column for the United States, with their own Huawei bans. France is considering putting Huawei equipment on its “high-alert” list. Last December, the Czech Republic’s cybersecurity agency issued security warnings against Huawei’s equipment. But that number does not seem to be growing.