With Huawei isolated, could Samsung, NEC get yourself a little bit of 5G pie with Nokia, Ericsson?
30 June, 2020
With growing pressure to keep China’s Huawei out of 5G network development, it could be time for organizations like Japan’s NEC and South Korea’s Samsung to shine.
Washington has pushed allies to bar Huawei, a Chinese telecom giant, from setting up next-generation 5G mobile systems, claiming its apparatus can be utilised to spy for Beijing.
Huawei denies the costs, but US pressure has prompted an about-turn in Britain.
The federal government had already pledged to slice the firm out from the most sensitive “core” elements of 5G that access personal info, and is currently reportedly pushing for plans to get rid of Huawei’s involvement in Britain’s 5G infrastructure by 2023.
But excluding Huawei isn't without difficulties, because there are simply two alternatives in Europe for 5G gear such as for example antennas and relay masts: Finland’s Nokia and Sweden’s Ericsson.
Britain has encouraged Washington to create a club of 10 democratic countries that could develop its 5G technology, but there's been little movement so far.
“Almost all the commercial networks sold in the world come from the big three,” said Sylvain Chevallier, responsible for telecoms at BearingPoint consultancy, discussing Huawei, Nokia and Ericsson.
“But an environment of three is certainly not best for operators, and if it falls to two it'll be worse even now,” he told AFP.
Teaming up
That leaves a good tempting potential opening for telecoms organizations like Samsung and NEC. But creating a successful 5G network is normally no simple task.
That is clearly a lesson Samsung has recently learnt. Despite being a major person in 3G, it discovered itself unable to contend with the big three on 4G and struggled to gain commercial contracts.
“This has been a challenge for Samsung,” said Daryl Schoolar, a mobile technology specialist at consulting group Omdia.
In building its 5G network, Samsung has up to now focused on THE UNITED STATES and elements of the Asia-Pacific region.
“So while operators may look uncertain about Samsung Networks, they are very much further along along the way of being a worldwide existence than NEC,” Schoolar added.
NEC does have some advantages, including a good partnership found in Japan with mobile operator Rakuten.
The firms have previously cooperated on a 4G network and so are now jointly creating a 5G system.
The Japanese firm can be a head on undersea cables, fibre optic networks and-thanks to its affiliate Netcracker-logistics management software.
“Netcracker has a strong existence with operators in European countries, which could be a real entry point for NEC,” said Stephane Teral, chief telecoms analyst at LightCounting, market research firm.
‘A major challenge’
NEC is tightlipped about its contracts for mobile phone networks, saying only that it's keeping feasibility demonstrations for “a number of consumers and we are engaged found in business discussions with others”.
Britain’s government offers reportedly asked both NEC and Samsung to take part in demonstrations as it looks to diversify its 5G options.
And on Thursday, NEC announced a good tie-up with Japanese operator NTT intended partly to speed up the development of a good 5G network.
Samsung and NEC joined forces two years ago and also have launched a joint advertising team to provide 5G products to European and Asian marketplaces.
Still, the road ahead will be challenging, said Schoolar.
“I suspect it’s a major task for NEC. It needs more than radios, it needs investing in persons who can do program integration, sales, customer care, network design and engineering,” he said.
“Plus NEC will need to build operator trust that they will be there to aid them on five to a decade as those 5G networks evolve.”
Washington has backed the application of non-proprietary technology like Start RAN in 5G production, hoping it'll provide an entry point for US firms.
Such a approach would open up opportunities for NEC, permitting them to “create an monetary model that could shake up traditional equipment manufacturers,” said Chevallier.
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