As Huawei Faces Western Challenges, China Continues 5G Advance

Huawei (News - Alert) is in the headlines in U.S. media reports and newspapers a lot lately. And it hasn’t been good news. But that hasn’t hurt the forward-momentum of new technologies like 5G within China, the company’s home country.

The U.S. government has long discouraged U.S. network operators from using Huawei gear to power their services. Many people in the government believe Huawei poses a security threat to the U.S., and that using its networking equipment and other technology could provide the Chinese supplier a means with which to eavesdrop on our communications and control our networks – and any endpoints connected to them and data flowing through them.

President Trump turned up the heat even more on the Chinese tech giant when he took office. And earlier this month Vancouver police arrested Meng Wanzhou, Huawei CFO and daughter of the company’s founder. The Canadian’s made the move at the request of the U.S. government, which is requesting Meng’s extradition on charges of violating U.S. sanctions on Iran through Huawei’s business dealings.

Also this month U.K. network operator BT banned Huawei as a supplier. It announced it won’t be using the Chinese supplier’s technology to power its 5G network. And it said Huawei gear in its 3G and 4G networks will be removed. Last month New Zealand rejected Huawei’s 5G bid.

However, reports indicate that 5G is moving full steam ahead in China. MIT (News - Alert) Technology Review writer Elizabeth Woyke this week reported that large-scale 5G test networks are up and running in dozens of Chinese cities.

The locales include city centers in Beijing, Shanghai, and Shenzhen. But the list also includes places like the Fangshan district in southwest Beijing, Woyke writes.

“Today, this neighborhood of sleepy apartment buildings and train tracks is part of a mobile revolution enveloping cities across China: the world’s biggest rollout of 5G technology,” she notes. “Last fall, the Fangshan government and China Mobile, the country’s largest mobile operator, outfitted a 6-mile (10-kilometer) road with 5G cell towers. Since September 2018, companies have been using the connectivity to test wireless communications between autonomous vehicles and their surroundings. The 5G network transmits data from car sensors, roadside sensors, and video cameras installed above the road to a local data center, which analyzes the information and sends it back to the vehicles to help them navigate.”

China Mobile is controlled by the Chinese government. So are China Telecom and China Unicom (News - Alert).

“China wants to use 5G in smart cities and connected cars—for starters,” Woyke says. “A prime example is Xiong’an, a new city that the government is building 80 miles (129 km) southwest of Beijing to ease crowding in the capital. China Mobile and China Telecom have already established test networks there. Companies including web giant Baidu are using these networks to live-stream events in virtual reality and, as in Fangshan, enable autonomous vehicles to transmit data to each other so they can avoid collisions. Local authorities have encouraged developers to create 5G-based applications related to telemedicine and urban infrastructure, while Chinese companies want to use 5G to add connectivity and intelligence to factory equipment.”

Huawei leader Ken Hu recently told attendees of an industry event that 5G will share the future of business and humanity. He added that Huawei has been working on 5G for more than a decade.

As TMC reported previously, China is poised to lead the world in 5G subscribers, according to analysts at CCS Insight. Half of the planet’s 1 billion 5G users by 2023 will reside in China, it says. It adds that 40 percent of the 2.6 billion subscribers by 2025 will be from China.

"We see China playing a far more influential role in 5G than it did in 4G,” said analyst Marina Koytcheva. She’s vice president of forecasting at CCS Insight. “Size, scale and economic growth give China an obvious head start. But we expect network deployments to be much faster than in the early days of 4G. China will dominate 5G thanks to its political ambition to lead technology development, the inexorable rise of local manufacturer Huawei, and the breakneck speed at which consumers have upgraded to 4G connections in the recent past."

China’s 13^th Five-Year Plan, for 2016 to 2002, makes clear its political ambitions relative to technology. That includes accelerating 165 major projects, which are likely to generate $75 billion in ICT business opportunities, according to research firm IDC (News - Alert). The Five-Year Plan also addresses entrepreneurial efforts and innovation; policies (like Internet+) to improve public well being; the Belt and Road Initiative, which aims to more closely connect China with other parts of Asia and Europe; the expansion of Free Trade Zones; and establishing China as an internet powerhouse.

Huawei is helping to power some of that. The company is the market leader in a wide array of network technology categories such as optical networking. And its marketshare has risen quickly in other important areas like Ethernet switching and smartphones.

“Huawei has unmatched resources, scale, and market reach, has demonstrated technical expertise equal to the western vendors, and has the ability as a private company to invest and take risks that public companies cannot,” IHS (News - Alert) Markit recently noted.