Can the US build its own 5G to compete with Huawei?
The U.S. wants a 5G rival to Huawei. Experts say it's too late.
What would it take to build a viable American alternative to Huawei's 5G infrastructure? For starters, a time machine.
"The ship has sailed on this issue; 5G is already being deployed," said Will Townsend, a senior analyst at Moor Insights & Strategy. Any effort to create a 5G rival to Huawei — whether from scratch or through a joint venture with existing companies — would likely take three to five years and tens of billions of dollars in investment, he said.
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A White House official said this month that the government is working with companies, including Microsoft, Dell and AT&T, to develop technology that would reduce the reliance on Huawei equipment. But experts say the U.S. isn't capable of fielding a competitor in a realistic time frame, no matter how badly the government wants it.
This timeline has been a central issue for U.S. officials who have tried to persuade allies to block Huawei from their 5G infrastructure deployments over security concerns. The U.K. government said in late January that it would allow Huawei to provide equipment to some portions of its 5G network. Germany's legislature is set to vote on a similar decision in the coming weeks.
"The problem that we've had is that a lot of European [countries] say look, you don't want us to use Huawei but in terms of price and scale, they are in a different category than everyone else," said former Homeland Security Secretary Michael Chertoff. Huawei has been able to outpace its rivals in part due to its dominance of the Chinese market and government subsidies, said Chertoff, who now serves as executive chairman of the security and risk management firm the Chertoff Group.
So U.S. officials have bolstered their efforts to find a solution. Telecom experts said they've been flabbergasted by many of the proposals, such as Attorney General William Barr's suggestion last week that the U.S. should consider taking a controlling stake in Nokia or Ericsson to compete with Huawei.
"I sure as hell don't know [how this could happen]. I don't think anybody can imagine it," one telecom industry executive said, adding that Nokia, Ericsson and Huawei would all likely push back against such plans. By the time the effort got off the ground, 5G infrastructure will already be fully deployed, he added. "What the attorney general said is so under-formed and far away from what the market reality is."
Huawei controls about 28% of the telecom equipment market, and its revenue for this sector is nearly as much as Nokia and Ericsson's combined, according to market research firm Dell'Oro Group.
"Current technology from our competitors or building it from scratch in the U.S. will be one to two years behind the comparable Huawei products," spokesperson Glenn Schloss said in an email. "If the U.S. wants 5G hardware and software developed by a U.S. or European company, companies can begin negotiations with Huawei to license our 5G technology."
The U.S. contends that incorporating Huawei equipment into 5G infrastructure deployment would pose a national security risk because the Chinese government could use it to spy on communications or disrupt networks. U.S. officials recently told allies that Huawei for the last decade has been capable of secretly accessing mobile networks though backdoors meant for law enforcement, The Wall Street Journal reported. In a statement to Protocol, Huawei dismissed the allegations as "lies" and said it operates independently from the Chinese government.
Last November, President Trump said he personally appealed to Apple's Tim Cook to help build 5G in the U.S. during a November visit to the company's Austin manufacturing plant.
Townsend dismissed that effort as unrealistic. "Cellular infrastructure is worlds apart from building iPhones and tablets," he said. "It's a totally different skillset and competency, and it's something you just can't start from zero."
Rather than try to catch up on 5G, the U.S should look to the future, said Thomas Marzetta, distinguished industry professor at New York University's Tandon School of Engineering.
"One possible strategy is a major new research and development effort in the U.S., funded by the government, that would attempt to leapfrog the competition," he said. "Forgo trying to compete at the 5G level and instead innovate and be the first to 6G."