"Given the uncertainty this creates around Huawei's supply chain, the U.K. can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment," Dowden said. The ban on Huawei equipment is expected to delay 5G rollout in the U.K. by at least two years, and add up to two billion pounds to the cost of the new network, he added.
Three UK: Banning Huawei will delay our 5G rollout
The government said it acted on the advice of the NCSC in banning Huawei, but acknowledged that the decision would set 5G roll-out throughout the country back by two to three years. They estimated this would increase costs by up to 2 billion, as opposed to the 18.2 billion suggested in this latest report.
In his speech to the Commons yesterday, culture secretary Oliver Dowden warned that the decision to ban Huawei would have a financial cost for the UK's network operators and further delay the nationwide rollout of 5G.
"In addition, requiring operators to remove Huawei equipment from their 5G networks by 2027 will add further hundreds of millions of pounds to the cost and will further delay the rollout. That means a cumulative delay to 5G rollout of two to three years, and costs of up to 2bn. That will have real consequences for the connections on which all our constituents rely."
A Huawei spokesperson said: Political decisions have not only had a real impact on our UK business, the people we employ, and our customers, they will delay the 5G roll-out and put Britain into the digital slow lane.
The National Security Council's decision "will delay our rollout of 5G," Dowden said, adding the government estimates a delay of two-to-three years to 5G rollout plans, and additional costs of at least 2 billion.
"The [UK} government in January decided that we could participate in the rollout of 5G. That was a decision based on evidence and it was a good decision that will ensure the UK gets advanced technology. Connectivity has gone from being kind of a commodity that we all tried to get for the lowest possible costs to something that's actually really important.
Following this road, however, will lead to consequences for businesses across the country, including potentially lost revenues and delays to vital networking upgrades in rural areas. Telecoms companies, for example, may need to re-examine and re-organise their supply chains, while the wider economy may suffer a long-term productivity dip.
The most obvious consequences of the Huawei ban is a delay to the rollout of 5G across the UK, as well as a measured cost to the British economy. Indeed, most telecoms companies have relied on Huawei networking equipment to some extent, either in part or in whole, and may need time to procure the necessary technology from alternative sources.
The exclusion of Huawei would be dramatic for Europe in terms of long-term, net economic welfare losses. Restricting competition generally leads to higher prices. Thus, hindering a major player from competing in the 5G network, and as a consequence limiting competition, would result in higher investment costs, delaying 5G rollout. This, in turn, will result in slower technological growth and innovation, lower household incomes and a slower recovery from the anticipated recession.
However, the recession associated with the coronavirus pandemic will delay its rollout, jeopardizing the extent to which these opportunities can be realized. Slower economic growth and increased uncertainty have led to telecommunications operators scaling back their investments - an action that will inevitably delay the rollout of 5G.
Canadian telecom companies spent more than $700 million on Huawei equipment while the Liberal government delayed a decision on banning the Chinese company on national security grounds, Global News has learned.
Verizon last week settled a year-long legal battle with Doylestown, Pennsylvania over the installation of 5G hardware. The company and its infrastructure partner agreed to cut down on the number of small cells they will erect, delay installations by several months, hide small cells, and share revenues with the town.
This notwithstanding, each Member State must take its own decisions, although the US has warned that if any country uses Huawei in its 5G network, it will not share "sensitive data" with that country. In January, the British Prime Minister announced that Huawei was a high-risk provider and capped its share of the market in 5G networks at 35%. Several months later, the UK toughened its position and announced a general ban on the Chinese technology. As from January 1, 2021, it will no longer be possible to purchase Huawei equipment and those that are operational will have to be changed before 2027. France too has just announced that it will be restricting the use of equipment by the Chinese manufacturer in the rollout of mobile networks that use 5G technology.
As to auctions, several European countries such as Holland, Austria, Portugal or France have indicated over the last few weeks that they will be resuming the procedures to establish the bases or will start auctioning some spectrum licenses of 5G networks that had been suspended because of the pandemic. In Spain, the Vice President Nadia Calviño recently announced that due to the pandemic, it has not been possible to release frequencies occupied by television channels in the 700MHz band (known as the second digital dividend) within the timeframe established, which has caused a delay in the auction of that band of frequencies until the beginning of 2021. The reorganization of the radio spectrum is a consequence of Decision 2017/899 of European Parliament and of the Council, which had to be implemented by June 30. The frequencies of the second digital dividend will be used for the rollout of 5G networks in Spain (for further information on frequencies harmonized in Europe for 5G, you can access the National 5G Plan here).
China has resumed its massive rollout of 5G networks throughout the country, now that it considers that coronavirus is under control. According to GSMA estimates, in 2025 5G penetration will be 50% of the total connections in China, as well as in Japan, South Korea and the US, whereas in the case of Europe, the figure drops to 30%.
He said that there's no reason to believe that banning one vendor would cause a massive industry slowdown, providing everyone takes a multi-vendor approach. If a nation or an organisation chooses to build with one vendor only, then it will affect them, but not the industry as a whole.
British mobile network operators such as Three and Vodafone, both of which have committed to 2019 5G launch dates, have said in the past months that banning Huawei equipment could delay 5G rollout in the country; Three's David Dyson told the BBC that it could be delayed by as much as 18 months.
In May 2019, the US sent a delegation to the UK and tried to convince the British government to not use Huawei for their 5G rollout. Lord Darroch, who previously was Britain's national security advisor and later the UK's ambassador in the US after 2016, said that the US delegation had failed to give any "compelling technical arguments" that undermined the GCHQ's conclusion. Darroch said that the encounter with the US delegation, exposed that the US case was "really political, not technical". However Trump later introduced further sanctions in May 2020 in which Huawei was no longer allowed to use US-made chips. As a result of that, Ciaran Martin's team at GCHQ was no longer able to guarantee the security of Huawei's products and 2 months later, then prime minister Boris Johnson finally banned Huawei in Britain. Such a move would delay the nation's 5G rollout by up to three years, and is estimated to cost at least 2 billion to reach full removal of all Huawei 5G equipment from its network by 2027.[88]
Two of the three major Indian telecom operators, Reliance Jio and Bharti Airtel, have developed Open RAN network technology, working with U.S. and Japanese equipment makers and system integrators. In that underdeveloped market which features over a billion, mostly low-cost, mobile users, the Open RAN technology will allow faster and much less expensive deployment of high speed 5G than the traditional hardware systems offered by Ericsson, Nokia, Samsung and even Huawei. U.S. system integration firm Parallel Wireless estimates that Open RAN solutions, although needing some technological advances in energy efficiency to reach their full potential, could result in cutting total operating costs by 30-50%. In Turkey, telecom giant Turk Telecom is working on an Open RAN system, and Vodafone Turkey has already deployed such a network which is backwardly integrated with legacy 2-3-4G systems.
In the United States the three major mobile operating companies are all members of the Open RAN Policy Coalition and the international O-RAN ALLIANCE. All are developing products utilizing the new technology. The case study that likely will determine the economic viability of the new technology in the U.S. market is DISH network. The new operator is committed (under an agreement with the U.S. Department of Justice to acquire spectrum and other assets from T-Mobile) to field a nationwide 5G network by 2023. It has chosen Open RAN technology for its system and is working with major system integrators Altiostar and Mavenir, and equipment and software makers Red Hat, VMMare, Cisco, and Qualcomm as well as Ericsson and Nokia. DISH plans to do a limited commercial launch by the third quarter of 2021. 2ff7e9595c
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