Huawei 5G Ban May Cost UK £7B, Say Telcos in Panicky Report

Iain Morris
4/5/2019
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Economic scaremongering
UK operators have a vested interest in scaremongering. After waves of industry consolidation, very few large companies now make the infrastructure for mobile networks. A ban on Huawei would further reduce competition, removing a vendor that many operators today regard as the world's most advanced infrastructure player. In the long term, that could drive up costs and slow down innovation.

For that reason, any decision to exclude Chinese vendors from the UK's 5G market could be a big mistake. But in the short term, a ban seems unlikely to have a serious impact on the UK's economic prospects. Even if the country's operators did face a costly swap-out of network equipment, and a delay to the introduction of 5G, the game-changing services that Mobile UK describes in today's report will not arrive for several years -- and perhaps even longer.

Take the somewhat cliched example of the connected car, which -- predictably enough -- is discussed in Mobile UK's report. "Without 5G, connected and autonomous vehicles are unlikely to unleash their full potential," say the authors. But a Huawei ban that hinders 5G rollout by a maximum of two years, as Mobile UK argues, is not going to hold up the arrival of self-driving cars on UK streets. Nor is there any certainty that 5G will play an important role in connected cars when (if?) they do eventually appear. Parts of the car industry are understood to favor alternative technologies.

Reaching for other examples, Mobile UK grasps hold of smart lighting and smart refuse collections in urban areas. These could save councils about £2.8 billion ($3.7 billion) per year, it says. But why is the bandwidth and short signaling delay that 5G brings needed for these services? Cities could make (and are making, in some countries) investments in smart lighting and smart refuse collections using existing low-power, wide area network technologies, such as NB-IoT, in the cellular world, or LoRa and Sigfox, for those who prefer unlicensed spectrum.

In time, 5G just might fuel all manner of sophisticated new services. There is no shortage of excitement about "the edge" -- not the famous guitarist for an Irish rock band, but a reference to a more distributed cloud network, where network functions and IT resources are hosted in small data centers close to end users. By cutting the signaling delay, this overhaul should allow operators to support whizzy applications -- like virtual reality gaming on mobile devices -- that are not currently possible.

Not a Compelling 5G Application
Beanie-wearing U2 guitarist 'The Edge' performs in concert.
Beanie-wearing U2 guitarist "The Edge" performs in concert.

But the "Release 16" 5G standard that will support this overhaul will not be finalized for about a year, and Release 16 equipment seems unlikely to arrive in commercial networks until much later. Scott Petty, the chief technology officer of Vodafone UK, doubts commercial "edge" applications will arrive before 2023, citing the operational complexity of building a distributed cloud network. A 5G ban on Huawei that slows down the rollout of faster broadband services is unlikely to have much bearing.


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For others, the main concern is the lack of a compelling investment case for that "edge" overhaul. Mobile UK's report, with its paucity of examples, is evidence of the lack of "use cases" for 5G technology beyond enhanced mobile broadband. That explains why Huawei and other vendors have been so focused on promoting 5G as an "efficiency" tool that will help to lower network costs.

Far from costing the UK economy billions, a delay to 5G rollout caused by a Huawei ban might be no bad thing, says Angus Ward, the CEO of digital platform solutions for BearingPoint, a software and consulting company in the telecom sector. "Delaying 5G's launch is often presented as bad news for consumers, but 5G is primarily an enterprise market play, which according to some estimates is where two thirds of market demand will be," he says. "Most operators are not ready to sell 5G services to their enterprise customers. Equally important, many enterprise customers are not ready to buy 5G, as they haven't yet created the new use cases that require 5G's low latency and super speeds."

In his view, a 5G delay could even provide valuable "breathing space" for operators to come up with new business models for the technology. That could mean building partner ecosystems and trying to work in a more collaborative way with enterprise customers. "If operators make these changes, they'll be in a much better position to make a commercial success of 5G when it does finally launch." First-mover advantage can sometimes be an oxymoron.

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— Iain Morris, International Editor, Light Reading

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