In the end, following weeks of speculation, the most surprising thing about the UK's decision to ban Huawei is that it was not more stringent.
After market-research firm Enders Analysis warned a 5G ban would cost service providers up to £2 billion ($2.5 billion) in "rip-and-replace" fees, the government was not persuaded by Vodafone's insistence last week that it might prove considerably more expensive. But authorities bought into the argument that a swap-out in fewer than five years would be disruptive. Operators have been given seven and a half to rid their 5G networks of Huawei products.
Seven years is roughly the length of time separating the launch of the UK's first 4G network (October 2012) and its introduction of 5G services (May 2019). Unless something goes seriously awry in the usual hype cycle, operators will be preparing for a 6G launch in 2027. One option is to proceed with a Huawei 5G rollout and plan for the mother of all swap-outs when 6G comes along.
This won't happen, of course. After December 31, operators will no longer be allowed to buy Huawei's 5G products. Even if they could stockpile for seven years, they would not be able to benefit from future 5G tweaks and improvements. 6G could take longer to materialize than 5G did. A nationwide mobile swap-out might not take seven years, but it won't be a last-minute homework assignment, either.
All this means the UK operators reliant on Huawei products will start to plan immediately for a switch. And unfortunately, their options are limited.
Despite much excitement about a new technology called open RAN, and new 5G vendors like South Korea's Samsung and Japan's NEC, the safest bets are probably Ericsson and Nokia, two Nordic firms that already cater to UK network demands. Ericsson, with its better 5G reputation, is at the front of the queue. Not since a few straggly haired Scandinavians decided to go and harass some English monks has there been this much danger of a Viking takeover.
To recap, BT, the national incumbent, is the most heavily reliant on Huawei. It uses the Chinese vendor's products across about two-thirds of its radio access network (RAN), or roughly 12,500 sites, with Nokia supplying the remainder. Huawei is also used in BT's "core," the control center of the network, although a full transition to Ericsson will happen by 2023, says the operator.
Vodafone uses Huawei products at about 6,000 mobile sites, or roughly one-third of its RAN, relying on Ericsson for the bulk of its equipment. As for Three, the smallest network operator, it built a 3G network with Nokia and a 4G one with South Korea's Samsung before deciding on Huawei for its 5G upgrade. Telefónica-owned O2 is the only service provider with hardly any exposure to Huawei.
Table 1: UK operators and their mobile suppliers
|EE||Ericsson, Huawei||Huawei, Nokia||Replacing Huawei with Ericsson in mobile core; uses Huawei at two thirds of mobile sites and Nokia for rest|
|O2||Ericsson||Ericsson, Nokia||Uses Ericsson for two UK regions and Nokia for another two|
|Three||Nokia||Huawei, Nokia, Samsung||Used Nokia for 3G, Samsung for 4G and picked Huawei as its 5G vendor|
|Vodafone||Cisco||Ericsson, Huawei, Nokia||Last year said 56% of sites were Ericsson, 32% Huawei and 12% Nokia, although Nokia is being phased out by Ericsson|
|Source: Companies, Light Reading.|
While the government has not banned Huawei from the UK's 2G, 3G or 4G networks, the big problem for any Huawei-using operator is the need for compatibility between the 4G and 5G systems. The only alternative to using the same vendor for both is to build a so-called "overlay," but BT and Vodafone believe this would result in a sub-optimal 5G experience. Technology executives from both operators sounded resistant to the idea during a parliamentary session last week.
Compounding this problem is the fact that BT and Vodafone have made investments in a technology called single RAN, supporting multiple generations on the same platform. In swapping out 4G, they would need replacements for older technologies, too. BT's single RAN products from Huawei support 2G and 4G, while Vodafone appears to have single RAN Huawei products for 2G, 3G and 4G services.
These realities are a serious hindrance to Samsung, perhaps the only big 5G alternative to Chinese or Nordic vendors. For one thing, it lacks the 2G and 3G products that BT and Vodafone would need when replacing Huawei's single RAN equipment. For another, it touts the overlay that operators have resisted as a way around this issue.
For open RAN technology, in which Samsung has made investments, the Huawei ban has possibly come two or three years too soon. Telco executives are excited about open RAN because it would theoretically allow them to mix different suppliers at the same site, instead of buying all the products from one vendor. It promises competition, lower costs and innovation. But it still lags mainstream technology on performance. For Howard Watson, BT's chief technology officer, it is a medium- or long-term solution, not one that is viable now.
BT's likeliest next move is a RAN contract with Ericsson to replace Huawei. After the government's now-obsolete January decision, restricting Huawei to 35% of any 5G RAN, the operator began trials with Ericsson, which it does not currently use in commercial networks, and Nokia, which it does. Unless Ericsson disappoints, it seems likely to win the eventual contract. Handing that to Nokia would make BT solely dependent on the Finnish firm.
Disappointingly, this may cloud the outlook for open RAN as BT sweats the Ericsson assets for as long as possible. The risks to open RAN were outlined by Watson during his parliamentary grilling last week, before the Huawei ban had been confirmed. "If we take too much urgent action now and replace all with the small choice we have today, it delays when we can adopt a diversifying solution," he said.
But if BT's decision is tricky, Vodafone's looks even harder. Just as BT may introduce Ericsson alongside Nokia, Vodafone could bring in Nokia next to Ericsson, an observer might assume. The complicating factor is that Ericsson has been phasing out Nokia, which until last year supplied products for about 12% of Vodafone's UK network. The move suggests there was some unhappiness with Nokia's products.
In the current circumstances, it does not rule out a deal with Nokia, but it does increase the chance that Vodafone opts for some kind of Samsung or open RAN workaround. One intriguing possibility is a tie-up between Samsung and Parallel Wireless, a smaller open RAN vendor that promises support for 2G and 3G technologies. Vodafone has already carried out trials of its products.
Three's move is also uncertain. Its Samsung-provided 4G network was probably due for replacement anyway. The issue is how much of that has already been phased out by Huawei. Three has kept an unusually low profile in the last few months, not responding to queries about the status of its 5G deployment. Having steered clear of single RAN technology, and with old 4G products in its network, it is arguably less constrained than any other company in its choice of vendors.
Despite the timing of the ban, UK authorities say they are determined to bring diversity to the sector. Oliver Dowden, the Secretary of State of Culture, Media and Sport, today promised to lower the barriers to entry for new vendors. Additional funds for research and development would also be forthcoming, he said, without providing further details.
"Put simply, countries around the world, not just in the United Kingdom, have become dangerously reliant on too few vendors," he told the UK parliament. Today's decision threatens to make the UK market even less diverse.
- Huawei banned from UK's 5G market
- Samsung in battle to be seen as European 5G contender
- Writing on UK wall for Huawei
- UK bill for Huawei takeaway does not add up
- BT, Vodafone warn of blackouts if not given five years to be Huawei-free
- Huawei ban in UK is surely just a matter of time
— Iain Morris, International Editor, Light Reading