Opinion Interview: Huawei and the UK 5G Infrastructure Debate.

By: Shahzad Nadeem

Head of Smart Cities

23rd April 2020

3 minute read

Home » Insights » Opinion Interview: Huawei and the UK 5G Infrastructure Debate

The Internet of Things is the bedrock of smart, connected and secure cities.  A network of sensing and communication technologies enables the collection and analysis of data, making life easier and more efficient for everyone. 5g is an integral part of this ecosystem.

Shahzad, Head of Smart Cities, has extensive international experience of working in the telecoms market and we interviewed him to give his opinion on the current Huawei debate in the news this week:

Q: Shahzad, are the proposed restrictions realistic?

A: As Oliver Dowden, the UK telecommunications minister, puts it – “This has not been an easy decision, but it is the right one for the U.K.’s telecoms networks, for our national security and our economy, both now and indeed in the long run” says it all. It is about national security and not just economy.

Following on from the initial decision back in Jan 2020 to restrict Huawei to ‘non-core’ part of 5G infrastructure and 35% of market share, UK government has been under domestic pressure to take a hard line on the telecommunication equipment provider. Tougher sanctions from US to restrict Huawei’s access to semiconductor chips and blacklisting of 38 companies linked to Huawei has made the future direction quite clear.

It may look at bit unrealistic due to the heavy presence of Huawei in the current infrastructure but given the grace period till 2027, all 5G related equipment already installed will be taken out gradually.

Q: Is there a history of challenging mobile infrastructure companies?

A: Telecoms infrastructure being at the core of any country’s economy and security, obviously the selection of vendors and suppliers is not purely based on financial reasons. The international politics coupled with national security requirements play an important part in the selection of vendors. Although there are examples where telecom procurements have been made on grounds other than finance, something of this scale as in the case of Huawei, is quite unprecedented.

Q: What is the recipe for Huawei’s success in Europe so far?

A: Huawei’s disruptive entrance in the market with very low cost equipment and support to a level that they built parts of networks at their own expense was just overwhelming and surprising for the market.  A gradual, low cost, less risk and shared-ownership based marketing brought Huawei in the forefront in Europe and now they stand as a force to reckon with.

Q: Do you think the proposed restrictions will work?

A: Huawei’s contribution to UK economy so far and the potential for further contribution is quite evident. It is claimed that Huawei has always found ways to work around restrictions in the past but the ones we are currently dealing with are very fundamental and serious. This is quite clear however, that Huawei will not be able to sell 5G infrastructure in UK after Dec 2020 and already deployed assets will be dismantled by 2027.

Getting Huawei out of competition at a stage when UK is leaving EU and the economy has shrunk due to Covid-19, will have an imminent impact on the market competition and will give leverage to the European vendors. There are current programs in UK at government level to promote open RAN development in UK but these will take their due course.

 

Shahzad specialises in smart cities, mobile networks, MNOs, MVNOS, MVNEs, wholesale, m2m and IoT. If you would like to comment or discuss this topic further, please get in touch.

The Internet of Things is the bedrock of smart, connected and secure cities.  A network of sensing and communication technologies enables the collection and analysis of data, making life easier and more efficient for everyone. 5g is an integral part of this ecosystem.

Shahzad, Head of Smart Cities, has extensive international experience of working in the telecoms market and we interviewed him to give his opinion on the current Huawei debate in the news this week:

Q: Shahzad, are the proposed restrictions realistic?

A: As Oliver Dowden, the UK telecommunications minister, puts it – “This has not been an easy decision, but it is the right one for the U.K.’s telecoms networks, for our national security and our economy, both now and indeed in the long run” says it all. It is about national security and not just economy.

Following on from the initial decision back in Jan 2020 to restrict Huawei to ‘non-core’ part of 5G infrastructure and 35% of market share, UK government has been under domestic pressure to take a hard line on the telecommunication equipment provider. Tougher sanctions from US to restrict Huawei’s access to semiconductor chips and blacklisting of 38 companies linked to Huawei has made the future direction quite clear.

It may look at bit unrealistic due to the heavy presence of Huawei in the current infrastructure but given the grace period till 2027, all 5G related equipment already installed will be taken out gradually.

Q: Is there a history of challenging mobile infrastructure companies?

A: Telecoms infrastructure being at the core of any country’s economy and security, obviously the selection of vendors and suppliers is not purely based on financial reasons. The international politics coupled with national security requirements play an important part in the selection of vendors. Although there are examples where telecom procurements have been made on grounds other than finance, something of this scale as in the case of Huawei, is quite unprecedented.

Q: What is the recipe for Huawei’s success in Europe so far?

A: Huawei’s disruptive entrance in the market with very low cost equipment and support to a level that they built parts of networks at their own expense was just overwhelming and surprising for the market.  A gradual, low cost, less risk and shared-ownership based marketing brought Huawei in the forefront in Europe and now they stand as a force to reckon with.

Q: Do you think the proposed restrictions will work?

A: Huawei’s contribution to UK economy so far and the potential for further contribution is quite evident. It is claimed that Huawei has always found ways to work around restrictions in the past but the ones we are currently dealing with are very fundamental and serious. This is quite clear however, that Huawei will not be able to sell 5G infrastructure in UK after Dec 2020 and already deployed assets will be dismantled by 2027.

Getting Huawei out of competition at a stage when UK is leaving EU and the economy has shrunk due to Covid-19, will have an imminent impact on the market competition and will give leverage to the European vendors. There are current programs in UK at government level to promote open RAN development in UK but these will take their due course.

 

Shahzad specialises in smart cities, mobile networks, MNOs, MVNOS, MVNEs, wholesale, m2m and IoT. If you would like to comment or discuss this topic further, please get in touch.

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