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LONDON – Mobile operators have been announcing for years that the next-generation network, called 5G, will offer not only ultra-fast mobile speeds, but also advanced data technologies such as autonomous vehicles, robotics and more. artificial intelligence.
So it was a surprise last month when one of the world's largest carriers, Vodafone, in Britain, announced the suspension of its investments in 5G in Europe. The decision comes out of the heated debate over Huawei, a Chinese telecommunications giant, and uncertainty over the company's ban on European networks to ban the 5G network company because of national security concerns raised by the Trump administration. .
Vodafone's decision concerns only a small part of its activities in Europe, but shows how swirling questions about Huawei can cool the entire wireless sector. Even Huawei's competitors have warned that the new uncertainty could hurt business.
The global ban on Huawei, the world's largest manufacturer of telecommunications equipment, would have a "significant impact" on the wireless industry and lead to a "significant delay" in building new 5G networks, said Nick Read. General Manager of Vodafone.
Huawei's fate will depend on the largest annual wireless business conference, the MWC Barcelona, formerly known as the Mobile World Congress, which begins on Monday. Celebrating typical new handsets from Samsung, LG, Sony and other brands, this year's conference in Spain is eclipsed by less glamorous policy issues about behind-the-scenes infrastructure protection that keeps these devices connected to the Internet.
"Many operators are now delaying their investments in 5G because of the uncertainty about whether or not they can work with Huawei," said Mikael Rautanen, industry analyst at Inderes Oy, a research firm. "This concerns the entire telecommunications sector."
Huawei manufactures antennas, base stations, switches and other equipment that makes the technology work.
The Huawei debate is particularly intense in Europe, where network operators who have long relied on the company's equipment are facing new potential regulations. Britain, Germany, France, Poland and the Czech Republic are among the countries that are considering new restrictions on Huawei.
The UK and German authorities have indicated that a complete ban is unlikely, but the US-led campaign threatens to slow down the construction of new technology in Europe that, according to governments and businesses, is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For the past year, Trump administration officials have been working on a decree to ban Chinese telecommunication companies, including Huawei, from US 5G networks. The order would prevent US companies from buying equipment from China and other "conflicting powers", but would not prevent purchases of equipment manufactured in Europe.
The GSM Association, the global wireless business group, said the ban on Huawei equipment in Europe would disrupt the market as a whole and increase costs for consumers.
"This would delay deployment, technology, and probably higher prices," said Boris Nemsic, president of Delta Partners, a telecommunications-focused consulting and investment firm.
Huawei has become a lightning rod in the wider trade war between the United States and China. The Trump administration claims that Huawei is indebted to the Chinese government and that allowing its equipment in 5G networks will pose a serious risk to national security – a charge that Huawei vigorously denied.
Huawei's increased scrutiny seems to offer an opportunity to rivals such as Ericsson and Nokia, but company executives have said it could create a more general slowdown.
"All our customers are trying to understand what that means and this creates uncertainty," said Borje Ekholm, Ericsson's Managing Director. Financial Times this month.
Ericsson and Nokia, who declined to comment, have taken market share on Huawei over the past decade, struggling to cope with its rival's lower prices and significant investments in 5G and D & # s 39, other emerging technologies. Many carriers claim that China's 5G Chinese technology is more advanced than its Western counterparts.
Although blocked by the United States, Huawei is the largest telecom equipment vendor, accounting for about 28 percent of the global market, according to Dell'Oro Group, a market research firm. Companies such as Cisco Systems provide equipment such as routers used by operators from other parts of their networks.
The new 5G networks represent a unique opportunity for a decade. In Europe, mobile operators are expected to spend at least $ 340 billion by 2025 to build the networks, according to the GSMA.
Ericsson and Nokia have been careful not to take advantage of Huawei's misfortune, perhaps fearing that China will react against European companies if new bans are introduced against Huawei.
The two companies each generate about $ 1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. In comparison, Huawei earns $ 3.5 billion a year in Europe, says Ferragu.
Any company obliged to replace Huawei hardware will have to bear high costs. "It would take some time for existing suppliers to tailor research, operations, sales, services and partnership arrangements to fill the gap," Dell'Oro Group said in a recent report.
It is perhaps for this reason that mobile operators who have long depended on Huawei are defending themselves. Mr. Read of Vodafone urged governments to act with caution before imposing new restrictions, as much of the current debate was not "fact based".
"The noise level is unhealthy," he said.
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