American 5G Vendors Getting More Time in the Spotlight
Sweden's Ericsson, Finland's Nokia and South Korea's Samsung continue to supply the bulk of 5G equipment in the US. However, some newer 5G providers such as Gogo and Dish Network are specifically looking for American equipment suppliers for their own 5G buildouts.
"We've been partnered with ZTE in the past. We now have an American vendor in that role," said Oakleigh Thorne, Gogo's CEO, during the company's recent quarterly conference call with investors, according to a Seeking Alpha transcript of his remarks.
Gogo officials declined to name the vendor the company is using, but promised to do so at some point in the future.
Similarly, Dish Network is specifically planning to use American vendors for its own planned 5G network buildout. "We do think it brings into play American vendors that have been left out of the traditional networks," Dish's Charlie Ergen told Light Reading. "So we know we'll have a much more American-centric set of vendors than the traditional incumbents."
During Dish's own conference call with investors, Ergen named Cisco, Intel, Red Hat and Altiostar as 5G vendors that Dish would consider.
Now, to be clear, the 5G efforts by Gogo and Dish are mostly peanuts compared with the 5G buildouts that companies such as T-Mobile, AT&T and Verizon are engaging in with Samsung, Ericsson and Nokia. For example, T-Mobile is spending a total of $7 billion split between Nokia and Ericsson for 5G, likely covering equipment on tens of thousands of towers. Gogo plans to cover roughly 200 towers and plans to spend "a few million dollars" later this year on the project, which aims to use 5G technology to speed up its Internet service on airplanes.
Gogo's stressing that its new supplier is American is likely due to its getting burned by initially turning to Chinese supplier ZTE. Gogo had planned to upgrade its wireless network with equipment from ZTE but halted that effort last year when the Trump administration temporarily banned US business with the Chinese supplier as part of President Trump's wider trade war with China. Although that ban has since been rescinded, Gogo executives appear unwilling to plant millions of dollars in investments on the shifting sands of Trump's negotiating tactics.
Indeed, the emphasis on American vendors by Gogo and Dish comes as little surprise given the Trump administration's trade war against China, Trump's own personal aversion to globalization and trade, and his promotion of US-based manufacturing. Dish, after all, is basing its 5G plans on a deal with Trump's Justice Department.
Nonetheless, the trend likely comes as welcome news to US 5G players such as AltioStar, CommScope, Affirmed Networks, Cisco, Altiostar, Airspan, JMA Wireless, Mavenir and Parallel Wireless, all of which have loudly boasted of their 5G products. It's also a trend that foreign suppliers are clearly aware of -- for example, Ericsson recently announced it would build a 5G manufacturing center in the US.
However, completely transitioning the US marketplace from foreign 5G suppliers to domestic ones would ultimately require a massive transformation of the world's electronics supply chain, something that probably won't happen anytime soon.