A news report on CNBC claimed that experts believe that in cease of the Chinese telecom giant Huaweri remaining banned in the United States would not impact the speed of roll out of the next-generation 5G mobile networks in the country. However experts also said that ban on the company leading to a potential shortage in competition could impact some of the smaller countries and even Europe.
The Chinese firm along with the state media of China have been issuing warnings about reduction in competition, resultant increase in costs of 5G networking hardware, and the slowing down in speed of the roll out of the critical, high-speed technology would be the outcome if Huawei is banned.
According to a comment from Eric Xu, one of Huawei’s rotating chairmen, back in November last year, the US would fall behind in introduction of 5G technology compared to the rest of the world because of the ban on the Chinese company. On the other hand, an op-ed on the Chinese state-backed publication Global Times claimed last month that if Huawei was to get blocked in Europe, it would also lag behind in the introduction of 5G.
But according to experts such fears need not necessarily be true because the shortage of Huawei not being in the market could be made up easily by major rivals including Nokia, Ericsson and Samsung.
“Even if Huawei was permanently excluded from the U.S., its competitors like Nokia, Ericsson, Verizon and AT&T, to name a handful, have the scale to ensure that the U.S. is fully catered for. Qualities like speed are unlikely to suffer in the U.S. in this scenario,” Vinod Nair, a Singapore-based senior partner at advisory and investment firm Delta Partners, said.
The absence of the Chinese firm in a number of markets has helped a number of its rivals to pick up its business in 5G. For example, an agreement to supply U.S. carrier Verizon with some equipment for 5G was announced by South Korea’s Samsung in January. On the other hand, Samsung, Ericsson and Nokia was chosen to supply hardware for the 5G network of AT&T last year.
“There are three significant alternatives: Nokia, Ericsson and Samsung Networks,” Shaun Collins, CEO of technology research firm CCS Insight, said. “The first two are obvious. Samsung Networks has increased market share in wake of the challenges to Huawei. It has a deep and valuable set of customers in Korea for its 5G Infrastructure and is a significant beneficiary in the USA.”
However one of the factors that helped Huawei to become so popular is because of cheaper deals facilitated by it offering customers favorable financing deals via banks and selling cheaper equipment in addition to faster rolling out networks.
Some countries could suffer when it comes to the rollout of 5G in eventuality of Nokia, Ericsson and Samsung concentrating their efforts to capture market share in the markets where Huawei is absent, Nair said.
“Smaller Asian markets may suffer if Huawei’s competitors turn their attention toward the U.S. and major European economies to fill the void,” Nair said.
There would be a slower roll out in some of the market where Huawei would be absent, said Collins of CCS Insight.
“Many of the operators we speak with have said that without Huawei in the network, 5G rollout will slow. It is the market leader in size and 5G development,” Collins said. “Even Ericsson and Nokia acknowledge that, when one of the CEOs said that hampering Huawei will slow the whole 5G industry rollout, as it holds so much of the technology right now.
(Adapted from CNBC.com)