The coronavirus pandemic has not slowed down China's introduction of 5G.
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China is in full swing with 5G, hardly slowed down by a pandemic that has hit the world. This is a race between the nation and the United States that has been at the forefront of 4G cellular technology and wants to maintain its pole position in this next generation.
5G is the next generation of wireless technology to be launched worldwide and promises to provide much faster wireless service and a more responsive network. The ability to connect more devices and provide real-time feedback is expected to trigger a fundamental change in the way we live and work, and usher in new advances such as self-driving cars and advanced augmented reality experiences.
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The country that leads the way in the introduction of 5G could gain a head start in the introduction of these future technologies. And just as the U.S. has benefited from the multitude of services and companies that have emerged from 4G – think of everything from live streaming on Facebook to carpooling like Uber – many believe that 5G will trigger a similar renaissance of new businesses.
Generation China is a CNET series that deals with the technology areas in which the country wants to be a leader.
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There is another reason why both China and the United States want to be leaders in this area – any work on 5G will help countries control the important intellectual property that will affect the development of future wireless technologies.
2020 should be the year 5G became mainstream. But the spread of the novel corona virus has caused some to wonder whether the technology will be launched this year. The new corona virus, which causes a disease called COVID-19, first appeared in Wuhan, China, at the end of last year. Since then, it has grown into a full-blown pandemic that infects over 12 million people around the world, 3 million of whom live in the United States. The outbreak has resulted in closures in cities around the world that have forced businesses to shut down and citizens to shut down for weeks and months in their homes.
But when it comes to 5G, China continues to chug. It was the first country to be affected by the corona virus, but has largely recovered as employees return to work and 5G network deployment continues. Network device maker Ericsson has raised its estimate of 5G subscriptions from China in its latest report on mobility, despite the downgrading of numbers for North America and Western Europe. Much of the 5G subscriptions this year will come from China, the company said.
The White House has reportedly considered intervening at the federal level, offering tax breaks and asking US companies to step up their own 5G efforts. President Donald Trump's government has also tried to slow down China's 5G ambitions, mainly by restricting Huawei, the world's leading 5G device provider. US officials have long feared that Huawei equipment could be used to spy on US citizens and their allies.
However, the government's recent moves could backfire and significantly impact the global 5G global supply chain, which could also slow US deployment and potentially fragment the market.
Here is a breakdown of the operations.
Where are the US in 5G?
Each of the major U.S. mobile operators deploys 5G in different cities in the U.S.
Much of this work started in 2019, but things really should increase in 2020. Then the coronavirus pandemic hit. Executives from AT&T, Verizon, and T-Mobile found in their first quarter earnings quotes this spring that they had experienced some deployment disruptions, but reassured investors that they were confident in their 5G deployments.
However, it is unclear how the pandemic will affect deployment as virus cases continue to increase and states and locations are considering blocking. A big risk is navigating through local bureaucracies to deploy small cells.
"Our 5G deployment continues, although we continue to steer and allow delays," former AT&T CEO Randall Stephenson said of the company's recent earnings call before stepping down from his post. He said AT&T "had no intention of slowing the delivery of 5G and fiber and the like, but the reality is that much of it is beyond our control."
As a result, Ericsson has adjusted its expectations for 5G subscriptions in North America for the rest of this year. The device maker predicts that 13 million people in North America will subscribe to 5G in 2020, compared to their previous forecast of 16 million.
In terms of service, T-Mobile offers a nationwide 5G network, but it's a version that is only gradually faster than 4G. AT&T is building a similarly extensive 5G network, but is still within range of T-Mobile. Verizon invested in superfast but super limited 5G in several markets, but is also planning a slower and more extensive network for the second half of the year.
What about china
While 5G deployment in the United States is determined exclusively by the private sector, China's 5G efforts are being driven by the government, including the Belt and Road Initiative, a strategy to increase global power by building infrastructure abroad. The government is also investing in its Made in China 2025 initiative to transform its economy from a manufacturer of goods to a supplier of high-tech products. This includes the development of technologies for all areas, from electric vehicles to smartphones and 5G devices. The ultimate goal is to overtake and possibly outperform rivals in the West.
The White House has largely viewed this strategy, which China is reluctant to publicly discuss due to other countries' concerns, as a threat to the United States and the global economy.
State control takes place in different ways. For example, cellular operators in the U.S. and China have to use a lot of devices to deliver 5G. This leads to thousands of large cell towers and tens of thousands of small cell antennas that need to be used in local communities and cities. The Chinese government can use its authority to install this equipment.
However, the U.S. federal government does not have the same jurisdiction or control over cities and towns. This can slow down the installation of the equipment. The FCC has tried to change the regulations to prevent local authorities from slowing down the process. But these rules are being challenged in court and some cities just don't want them.
The Chinese government has also invested massive amounts of money in companies like Huawei to develop 5G technology with great success. Chinese companies hold the majority of 5G patents worldwide.
And then there is the frequency policy of the two countries.
How do the country's guidelines differ and what does that mean for 5G?
Spectrum or the radio waves that wirelessly transmit everything from YouTube videos to emails are the lifeblood of a mobile network. It is a highly valued asset, especially as the demand for faster and more services increases.
The Chinese government made a mixture of low and medium band spectrum available for 5G early on. The low-band spectrum, which consists of frequencies in the 600 megahertz, 800 MHz and 900 MHz bands, can transmit signals over longer distances, penetrate walls of buildings and ensure better indoor coverage. It is the same type of spectrum that provides T-Mobile and AT&T networks with greater coverage.
The mid-band spectrum, which is in the 2.5 gigahertz and 3.5 GHz frequency range, offers more balanced coverage and capacity due to its ability to cover a radius of several miles with 5G, although more cell locations are needed than lower-band frequency bands.
AT&T and Verizon initially did not concentrate on these frequency bands for 5G and instead invested in the millimeter-wave spectrum – extremely high-frequency radio waves that essentially offer a souped-up WLAN hotspot.
Some critics accuse the Federal Communications Commission of not moving fast enough to bring new 5G mid-band spectrum licenses to the US market. The agency is currently organizing its first auction for the medium-band spectrum for 5G in the 3.5 GHz band from July 23, even though many countries in Europe have accepted the medium-band spectrum.
"Too much time to debate US spectrum policy could lead the Chinese to push ahead with their plans to build a mid-band spectrum below 6 GHz that will pose a number of technical challenges in the long term, including the interoperability of networks and devices and concerns about data security for US operators, "said Nicol Turner Lee, a Brookings Institution employee, in a research note.
How could China's first mover advantage at 5G harm the US?
There are a number of concerns. There are financial costs if China dominated 5G. Because, as we saw at 4G, any country that is a leader in the development and deployment of the latest technology will achieve more economic growth with this technology. And that means not only technological and economic power, but also geopolitical power.
The next industrial revolution that will usher in artificial intelligence, big data, and the Internet of Things will depend heavily on 5G networks. A winner in 5G could potentially be a winner in these other areas, exerting enormous power and influence all over the world.
And that could be a serious national security risk for the United States. There are US officials who are already raising the alarm regarding national security with regard to the Chinese telecommunications equipment supplier Huawei, which is the world leader in 5G technology.
What is the US doing to stop China?
One of the biggest things the US has done is gone after China's Huawei. Trump and his government have already banned the use of Huawei products and applications on national communications networks, on charges that the company has stolen secrets and may be spying for the Chinese government. The company has repeatedly contested these claims.
Nevertheless, the company admits that it understands the concerns of policy makers about cyber security. However, the company emphasizes that these are concerns of the United States government regarding all major 5G device vendors, including devices from other vendors such as Ericsson, Nokia and Samsung, which are also headquartered outside of the United States. Huawei executives say there must be a comprehensive approach to protecting 5G communications networks.
"We are aware that network security must be regulated for every operator and every host country," said Don Morrissey, who oversees congressional and legislative matters for Huawei. "And we advocated national and global third-party testing standards to ensure supply chain security. However, from a cyber security perspective, it doesn't make sense to single out a single company."
The U.S. government increased pressure on Huawei last month when the Department of Commerce issued new export regulations that would substantially hinder Huawei's access to semiconductor chips needed for the construction of cell phones and 5G infrastructure. The new rules prohibit chip makers, most of which are based in South Korea and Taiwan, from using US machines and software to make semiconductors for Huawei. These rules fill a void that allowed chipmakers to continue to sell to Huawei if their components and designs were made outside of the United States.
Why is the US targeting Huawei specifically?
Huawei is one of the largest manufacturers of 5G devices, and its technology is also considered to be the most advanced. It is also the second largest smartphone maker behind Samsung.
However, national security experts also believe that the company, which was founded in 1987 by a former officer in the Chinese People's Liberation Army, still maintains close ties to the Chinese government. And these experts, including directors from the CIA, the FBI, and the National Security Agency, testified before Congress that Huawei could conduct "undetected espionage" if its equipment was used on U.S. networks using backdoors in its Software would be used to spy on the United States and its allies.
Huawei has repeatedly denied these claims, claiming that it is not an arm of the Chinese government. However, US intelligence officials cite a Chinese national intelligence law that requires all companies to meet the Communist Party's demands for data sharing. There is also a long history of Chinese government-sponsored hackers stealing intellectual property from Western companies.
This is precisely what the U.S. Department of Justice has accused Huawei of in a 2019 indictment that accuses the company of embedded engineers at T-Mobile's Bellevue, Washington, facility for stealing equipment and trade secrets.
Here, too, the company has denied any wrongdoing.
The United States has also put pressure on other countries to ban Huawei as well.
Has any of the countries sided with the United States?
To date, only five other countries have followed the United States to ban Huawei on its communications infrastructure: Japan, Taiwan, Vietnam, Australia, and New Zealand.
Other U.S. allies, such as France, Germany, Italy, the Netherlands, and the UK, have announced plans to push Huawei's deployment forward with some restrictions. Britain's decision in January to move forward with Huawei was a major blow to the Trump administration, which had campaigned for Britain to keep Huawei out of its network.
But now France and Great Britain may think again. Earlier this week, British Prime Minister Boris Johnson announced that his government might change its stance on Huawei and further restrict the role of the Chinese telecommunications giant in building the UK's 5G network. There are also reports that the French national security agency recommends French telecommunications companies to avoid the Chinese company's devices without completely banning the technology.
Other countries, such as India, have also indicated that they may limit the use of the company's equipment on their 5G networks.
It sounds like US politics is working as intended. Is there a disadvantage for the US that follows this approach?
Yes, experts say there is significant risk to the 5G supply chain that could slow technology development and product deployment.
"In the end, the Trump administration's public bullying regarding the use of Huawei products can go backwards without coordinating with other competitors that make up the global 5G supply chain," Turner Lee said in her report.
In addition, the strategy could split the development of standards that set up essentially incompatible technology paths for 5G, similar to what we saw in 3G.
And if Huawei is able to repeat what it did in 3G and 4G with 5G, it could be ahead. Huawei has made a name for itself as a low-cost provider. If this is possible with 5G devices, network operators deploying their equipment in countries like China can offer inexpensive 5G services, which will lead to wider acceptance. More experience in dealing with the masses with 5G is invaluable for Chinese players who will contribute to future cellular standards that will help set the agenda for the direction of the technology.
Just look at the price differences. When Chinese mobile operators first launched 5G in November, the service cost about $ 18 a month. This price has already dropped to around $ 10 a month for an entry plan. In the meantime, U.S. operators like Verizon charge their customers $ 10 a month – in addition to their lower plans – for 5G services.