Mike Butcher explains in a brilliant thread why countries like the UK are making a conscious trade-off between security and prosperity.
First published in January 2020.
I’m pretty sick of the poor quality debate about whether to involve Huawei in the roll-out of 5G in the UK and elsewhere. The simple fact is that it is NOT the only provider of 5G networks – but it is the largest and (surprise!) the CHEAPEST ... not just because it is successful but because its research and development is massively subsidized by the Chinese government.
This support allowed Huawei to invest around $12bn in 2017, which is nearly three times Ericsson’s $4.1bn. Back in 2018 Huawei said it would invest $800m in 5G research and development, and would eventually spend $10-$20 BILLION annually in future on 5G research and development.
I repeat: $10-$20 BILLION!
What Western government is supporting its home-grown companies to such a huge degree? Almost NONE!
US senators have only just introduced legislation that would provide over $1 billion to fund the development of Western alternatives to Huawei. PEANUTS!
If they had more state support, Nokia (Finland), Ericsson (Sweden) and Samsung (South Korea) could easily fill the void left by Huawei. Even without it, they are picking up business where Huawei is not operating. Samsung is already supplying Verizon in the US with 5G and AT&T is using Samsung, Ericsson and Nokia for its 5G network.
Cisco (US firm) and Rakuten (Japan) have been trying to get attention with a different 5G architecture that would probably be far more modern in approach than Huawei as it uses 5G network slicing, a high advanced network architecture is far less reliant on physical networks. This new architectural approach around so-called ‘white box hardware’ can also use off-the-shelf chips from Qualcomm, Broadcom, Intel, etc.
But these approaches just don’t have anything like the state-backing Huawei gets from China. And let’s not even get into the sheer stupidity of Brexit, which collapsed Sterling, caused huge uncertainty and probably led directly to the sale of ARM (in 2016 for $32BN) the UK’s last major hard-core tech firm and the leading maker of chips for smartphones, to the Japanese SoftBank Group.
Guess what happened next? In 2018 SoftBank sold a majority stake in the China operations of ARM to... guess who? A China-led group of investors which aligns itself with Beijing’s goal of “reducing its dependence on Western technology”!
So here we are, selling off our Crown Jewels to China, and then afterwards wringing our hands about whether to buy China’s technology, which is now based on... what WE developed!
Meanwhile, telecoms firms in the UK which say that blocking Huawei from 5G would ‘harm competition’ and ‘slow 5G rollout’ do so mostly because they don’t want to deal with the complexity of different providers or higher costs.
As global corporations, they have almost no interest in the UK or other Western governments maintaining cybersecurity or keeping their intellectual property, and are voting mostly with their checkbook.
Boris Johnson gives green light for Huawei 5G infrastructure role https://t.co/N6xcx2zEHt— Guardian Business (@BusinessDesk) January 28, 2020
Countries like the UK are making a conscious trade-off between security and prosperity. The Government Communications Headquarters (GCHQ), National Cyber Security Centre (NCSC), etc, have assessed Huawei’s code and think they can deal with any issues for now. But who knows what might happen in the future?
But why don’t Western governments step up to the 5G plate? It’s not impossible.
If you look at the SEPs (standard-essential patents), no single company owns everything to do with 5G technologies anyway. This is a race which will be won with MONEY.
Top 10 Quantity of declared 5G SEP families. / WISPRO
Wake up call: China’s massive monetary support for Huawei’s research and development into 5G (and thus the entire future of the way we communicate with each other, HELLO!) is DESIGNED to destroy competitors like Ericsson, Nokia and Samsung. With Huawei everywhere, imagine trying to dismantle it?
To conclude: If Western governments HAD SOME COURAGE, they would start backing THEIR OWN companies in the development of 5G, rather than falling for technology from a government which is NOTORIOUS for industrial and other types of espionage. So, do we really want the entire future secrets of the planet’s innovation and research and development at the mercy of the Chinese government?
PS: I’m reminded of the time the British-based Marconi was dealt a fatal blow when BT snubbed it for its UK network. 2,000 jobs in research and development in Coventry, Liverpool and Beeston went PUFF.
Tweets posted on 27 January 2020 by @mikebutcher.
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