The success of 5G Wireless as a communications platform, as well as an incentive for device manufacturers and software developers to keep improving the systems we use for mobile functionality, depends on whether the standard applies to a global market. If the market becomes subdivided, and pockets of intellectual property become scattered throughout the planet like a connect-the-dots puzzle, engineers and developers will lose the incentive to continue fueling the standard's growth.
Suddenly there's a great deal of pressure on countries that have yet to be considered pinnacles of technology on the world stage, to make critical decisions that could shift the balance of power. 5G was initiated in large measure by China, whose engineers found a method to make smaller transmitters and base stations in greater numbers that could still be less expensive in the long term. But much of the world's ongoing efforts to improve telephony are now centered in Scandinavia. There, Nokia maintains Bell Labs — the crown jewel of all telephony — and Ericsson continues pursuing an ambitious effort to radically reduce transmitter power consumption, by increasing the gaps of time transmitters are allowed to enter sleep mode. Test results released last week, depicted below, show power consumption reduced by nearly two-thirds as 4G LTE transmitters become hybridized with 5G New Radio, and by three-fourths as LTE is replaced entirely with 5G.
One place where Ericsson has been conducting 5G tests is Warsaw, Poland, where the government is backing joint experiments by Ericsson and commercial telco Orange Polska (majority-owned by France-based telco Orange) to facilitate 900Mbps connections in the 3.4 — 3.6GHz band. During a high-profile meeting last Sept. 2 between Polish Prime Minister Mateusz Morawiecki and US Vice President Mike Pence, the two countries entered into an official agreement that effectively codifies Ericsson's relationship with Poland as its 5G equipment supplier.
“We believe that all countries must ensure that only trusted and reliable suppliers participate in our networks to protect them from unauthorized access or interference,” reads a Sept. 5 White House statement. “A rigorous evaluation of suppliers should include the following elements: 1) Whether the supplier is subject, without independent judicial review, to control by a foreign government; 2) Whether the supplier has a transparent ownership structure; and 3) Whether the supplier has a record of ethical corporate behavior and is subject to a legal regime that enforces transparent corporate practices.”
Although Huawei was not mentioned by name, Mr. Pence is already on record as having tied Huawei's corporate interests to China's state interests. Last year, he accused China, not Russia, as having been the culprit behind the alleged foreign influence of US elections. Then in a speech the following February in Munich, Pence singled out Huawei as the instrument China would use to meddle in the affairs of governments everywhere.
As Mr. Pence told the Munich Security Conference that month:
We cannot ensure the defense of the West if our allies grow dependent on the East. The United States has also been very clear with our security partners on the threat posed by Huawei and other Chinese telecom companies, as Chinese law requires them to provide Beijing's vast security apparatus with access to any data that touches their network or equipment. We must protect our critical telecom infrastructure, and America is calling on all our security partners to be vigilant and to reject any enterprise that would compromise the integrity of our communications technology or our national security systems.
The Vice President spoke of the need for a transatlantic alliance, cleverly distinguishing this entity from NATO.
The following May in Prague, representatives from 32 nations, plus NATO and the EU, entered into a non-binding agreement that, on the surface, would appear to establish the backbone of a largely transatlantic 5G alliance, also including Japan, South Korea, Australia, and New Zealand, but excluding China. Again without specifying China or Huawei, the agreement adopted carefully diplomatic language, stating, “The overall risk of influence on a supplier by a third country should be taken into account, notably in relation to its model of governance, the absence of cooperation agreements on security, or similar arrangements, such as adequacy decisions, as regards data protection, or whether this country is a party to multilateral, international or bilateral agreements on cybersecurity, the fight against cybercrime, or data protection.
“The overall risk of influence on a supplier by a third country,” the agreement also states, “should be taken into account.”
The Prague agreement also called upon state-sponsored stakeholders to be free-market participants like everyone else, while at the same time, seeing to their own responsibilities as global trading partners. A great many nations are themselves owners and operators of their telecommunications networks, while China has tried to position itself as a kind of non-executive majority stakeholder in Huawei. For its part, Huawei welcomed the Prague agreement, at least initially and on paper.
Poland's exclusive September agreement with the US was intended to serve as an example, the US administration has said, for the rest of Europe. However, although the signing was interpreted as a cooperation agreement between the two companies on 5G technology, that's not how the countries' joint declaration framed it. More specifically, it did not suggest any kind of trade or mutual sharing of 5G technology between the US and Poland. Indeed, with Orange's Warsaw tests beginning just days later, there's an argument to be made that the Poland agreement merely cements that country's working relationship with Ericsson, or at least with anybody except Huawei.
In a Huawei company video released Sept. 1, the company warned that the attitude exhibited by agreements such as this represent an approach to containing markets similar to the way the Berlin Wall attempted to control and contain a society.
“Nobody liked the wall,” said a Huawei spokesperson. “It represented division, isolation, fear. The world cheered when it came down. But now 5G — a mobile technology that's designed to connect people — actually threatens to become a symbol of division, just like the Berlin Wall. It doesn't have to be that way. Some countries are resisting US pressure.”
“It's already being called the first technological war of the emerging digital era in some circles,” stated Russia President Vladimir Putin, addressing an economic forum in St. Petersburg a few weeks after the Prague agreement was signed. There, Putin signed a series of agreements with China President Xi Jinping, one of which committed to Huawei partnering with Russian telco MTS to build the backbone of that country's 5G network.
Linking the agreement to MTS was an important strategic move for Putin. It extends the Huawei working relationship to two of Poland's neighboring countries to the east: Belarus, where MTS is the largest mobile operator and is building out that country's 4G infrastructure just this year; and Ukraine. There, in an interesting branding arrangement reached in 2015, MTS does business as Vodafone Ukraine, while still operating as a wholly owned subsidiary of MTS in Russia.
Earlier this month, Belarus became the first country to mandate the use of IPv6 protocol in its Internet networks. The IPv6 rollout in Belarus began in 2013, largely championed at the time by MTS. The move to purge IPv4 effectively orders ISPs there to update their equipment. And with Huawei's agreement with MTS, such a move could compel both ISPs and telco services to upgrade to Huawei routers sooner than previously planned.
For a company that doesn't like the Berlin Wall much, it seems to have a pretty good idea about where to build its successor.
The third country
The demarcation of Eastern Europe's new battle lines is becoming a point of interest for engineers in Vietnam. In a report last July, the International Monetary Fund credited Vietnam for easing regulations on private industry and taking positive steps to fight government corruption.
Up until this spring, Vietnam had planned to build its own 5G networks using its own resources and to do so ahead of its Southeast Asian neighbors. Its goal is to launch commercial 5G services for portions of Vietnam by June 2020. Citing the risk of outside influence, even from a country that it calls a trading partner, the Vietnam government was already on record as refusing to use Huawei equipment. To work toward this ambitious goal, using Verizon's US rollout schedule as a benchmark, the state-owned telco Viettel conducted successful tests of high-speed mobile connections in Hanoi last May.
That's when the Prague agreement was signed, which arguably opened up an opportunity for Vietnam to lead its neighbors in joining that commitment. But smaller commercial rivals there, including the No. 2 player Mobifone, had already established working commitments with South Korea's Samsung. And throughout the country's existing wireless infrastructure, Samsung had already established itself as the pre-eminent supplier of choice.
It's the type of situation that could be just the shot in the arm Samsung needs, after only garnering less than 3% of the world's telecommunications infrastructure, by some estimates, compared to Huawei's nearly 29%. While Samsung has been seeing revenue gains from 5G, those gains have largely been limited to the US and South Korean markets. There could be three 5G power centers in the world, not just two, if Vietnam continues to relax restrictions on private firms, and Mobifone paves the way for Samsung to upgrade cellular towers there.
Where Vietnam goes, Thailand may follow. That country has already formed an exploratory committee to rethink its national 5G strategy, after having previously followed the lead of Malaysia, which had already committed to Huawei. In a best-case scenario for Vietnam as well as for South Korea, Singapore may yet follow suit, after having convened meetings with US negotiators.
Much depends on the availability of both equipment and engineers from Samsung, and the willingness of that company to pour everything it has into an East Asian blockade of Huawei.
But in a bewildering defiance of existing defense and economic agreements, the US President continues to downplay the threat posed by North Korea's continued testing of short-range ballistic missiles. The only conceivable target a short-range North Korean missile strike might have (other than a prescribed burn of its own corn crop, or the suppression of a small internal uprising) would be South Korea. In a Sept. 24 statement from the United Nations, the US President reasserted there was no need for any punitive action against North Korea for the testing of short-range missiles.
It's that unusual, and perhaps unexplainable, diplomatic stance that is compelling South Korea to move forward without US government assistance or backing. If Samsung succeeds anyway, it could still achieve its goal, as some analysts believe is still possible, of attaining a 20% worldwide telecommunications market share by next year. Such a plan would likely depend on the support of Thailand, Singapore, and the potential jackpot country in the region, Japan.
But it would potentially push Ericsson, Poland's new partner, out of Vietnam, where it currently has a contract with that country's military. What's more, it could exclude the US from a potential renaissance of communications technology throughout East Asia. Theoretically, in a worst-case scenario for the US, should it become boxed in on both sides and attempt to exert further influence on other countries for security reasons, the US — not China — could find itself violating the spirit, if not the literal terms, of the Prague Agreement. It could find itself playing the mysterious role of the “third country,” exerting its influence over markets for the good of the state, and being faced with taunts from world leaders positioning themselves as champions of the free market: Xi Jinping and Vladimir Putin.