5G breaks out of the siege: the US-led "encirclement and suppression" and Huawei's "counter-encirclement and suppression"

In order to suppress Chinese high-tech companies such as Huawei, US Secretary of State Pompeo has been lobbying to persuade other countries not to use Huawei equipment, defining it as an "untrustworthy IT supplier." On August 2, local time, after repeated lobbying and enlisting allies to participate in blocking Huawei, the US State Department website published a list of so-called "5G Clean Networks," claiming that 27 operators around the world have abandoned Huawei and ZTE equipment in the construction of 5G networks, thus building a "5G Clean Network" and ensuring the "highest security standards."

Since May 16 last year, when the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce included Huawei and its 68 subsidiaries in the so-called "Entity List" on the grounds of "threatening national security", the U.S. authorities have been tightening their suppression measures against Huawei, even at the cost of "hurting the enemy by a thousand and losing eight hundred" to expand their "results" of defeating the latter. However, under the pretext of "security", the U.S. is worried and concerned that China's high-tech represented by Huawei's 5G is beginning to catch up.

5G breaks through the siege, but Huawei is blocked

Why is 5G so important? Simply put, as a general-purpose technology, 5G has a much wider application scope than 4G and is a catalyst for the realization of the "Internet of Everything". Based on the huge economic value, wide-ranging impact and importance of 5G to national security, countries around the world have accelerated their 5G deployment in an attempt to seize the commanding heights of the 5G industry.

According to Ericsson's mobile market report released in June, there are more than 75 5G commercial services around the world to date. These networks were initially concentrated in larger cities. By the end of 2019, the global 5G population coverage rate was about 5%, with the widest coverage in the United States, China, South Korea and Switzerland. In South Korea, operators quickly established 5G networks covering most of the population.

Image source: Ericsson

Dell'Oro, a market research organization, also announced that in the first quarter of this year, Huawei ranked first in the 5G communication equipment market with a market share of 35.7%, leading the second-place Ericsson (24.6% market share) by nearly 10%, Nokia ranked third with 15.8%, and Samsung ranked fourth with 13.2%. In the global 5G race, Huawei has already stood out and become one of the leaders of 5G standards. It is currently the world's largest communication equipment manufacturer and is seeking a leading position in 5G equipment manufacturers in the fierce international competition.

Image source: Dell'Oro

However, "a tree that stands out in the forest will be destroyed by the wind", especially in the context of China's rise and the Western world's concerns that its global interests and dominance are threatened. Therefore, Western countries led by the Trump administration accused Huawei's 5G equipment of having backdoors and espionage risks, and sought to launch a new round of crackdown on Huawei worldwide.

Initially, many countries resisted this, refusing to believe that Huawei posed a huge risk. The UK is a typical example.

At the time, Britain said it had set up a security system to ensure all Huawei equipment was vetted before entering its communications networks. Under the January rules, Huawei would be restricted to "non-core" parts of the network.

The turning point came in May, when the United States introduced new export control regulations against Huawei. This policy, which is scheduled to take effect in September, may put Huawei's supply chain in crisis. The UK originally allowed Huawei to account for up to 35% of 5G network facilities, provided that it did not involve "core" elements that process personal data. However, the latest US sanctions may cause Huawei to seek other component suppliers outside the United States, and British intelligence agencies cannot ensure their safety. In the end, the UK completely turned to the United States.

Under the siege of the Western world, Huawei's 5G expansion has been hindered, and it has stopped updating the number of 5G commercial contracts it has won worldwide (92) since February. Ericsson has taken advantage of the situation. The latest data shows that with Japanese telecom operator SoftBank Mobile choosing Ericsson to provide cloud-native dual-mode 5G core network (for 5G SA commercial use) in July, Ericsson's total number of 5G commercial contracts worldwide has reached 100, covering 27 countries and regions.

This is closely related to the United States' unremitting efforts to persuade various countries to refuse to use the technology and equipment of Chinese suppliers. The so-called "5G clean network" is even more divorced from pure commercial competition. The game of interests between geopolitics is being directly exposed to everyone in the form of a technological war.

Supporters and opponents of Huawei 5G

Despite the US's criticism, many countries around the world still have confidence in Huawei's 5G technology. Although Huawei has not officially updated the data of 92 5G commercial contracts, it is widely speculated that the number of 5G commercial contracts Huawei has obtained has exceeded 100.

There is no doubt that Huawei has an irreplaceable advantage in 5G technology. On the other hand, compared with telecom equipment manufacturers such as Ericsson and Nokia, Huawei's equipment has a very obvious price advantage. Experts point out that Huawei's prices are about 30% lower than those of Ericsson and Nokia.

Based on public channel information as of August 3, Jiwei.com has compiled a map of Huawei 5G around the world, as shown in the figure below. The countries/regions marked in green have either cooperated with Huawei or stated that they will not restrict Huawei.

The red marks are countries whose governments have explicitly stated that they will exclude Huawei, including Australia, the United States, Poland, Vietnam, the United Kingdom, Denmark, Estonia, Latvia, the Czech Republic, Sweden, Romania, Japan, France, Greece, etc.

Operators that have made clear statements to exclude Huawei include Singapore (Singapore Telecom, Starhub and M1), Portugal (NOS, Altice and Vodafone), Italy (Telecom Italia) and New Zealand.

Among the latter, some governments have not made a clear statement or have stated that they will not exclude Huawei, but operators have not chosen Huawei. For example, in New Zealand, Vodafone and Spark chose to cooperate with Nokia; in Portugal, the three telecom giants that dominate the local market (NOS, Altice and Vodafone) have clearly stated that they will not use Huawei technology in 5G core networks;

In Italy, telecom operator giant Telecom Italia has "shut out" Huawei from bidding for 5G core equipment in Italy and Brazil; Singapore's three major domestic operators are cooperating with Ericsson and Nokia on 5G.

In addition, yellow represents some countries that have not yet made a final decision on whether to exclude Huawei, including Canada, Brazil, Italy, Germany, and India.

Analyzing Huawei's supporters, specifically, Huawei reached an agreement with Russia's largest operator, Mobile Telecommunications Systems (MTS), in June 2019, under which Huawei will provide equipment for Russia's 5G network construction.

On March 26, 2019, Bahrain, the United States' Middle East ally and home to the Navy's Fifth Fleet, confirmed that it would use Huawei technology to build a 5G network and expressed no concerns about "security threats."

US media reported that Washington has failed to reach a consensus among its allies on the Huawei issue, which has puzzled many experts. The report pointed out that the US intelligence agencies listed Huawei as a major national security issue at least 10 years ago, but never produced clear and convincing evidence. From the beginning to the end, the "groundless" accusation has been a common political tactic used by the United States.

Among Huawei’s opponents are many staunch allies of the United States. The first one that must be mentioned is Australia, which has always followed the United States in the “Five Eyes Alliance”.

In 2011, the Australian government blocked Huawei from building the NBN, and then in 2019 it again blocked Huawei from building the country's 5G network on the grounds of "national security." Earlier, Huawei Australia Chairman John Lord resigned because he believed the ban would result in Australia having a second-rate mobile network, and the Australian people were very sad.

Next is New Zealand. In November 2018, the government banned wireless network operators from using Huawei equipment in 5G networks on the grounds of national security. Although the then New Zealand Prime Minister Jacinda Ardern emphasized during her visit to China in April that New Zealand did not ban Huawei 5G, the decision to restrict the use of Huawei products cannot be changed.

Denmark said that the country would only consider using 5G equipment from its allies and exclude suppliers from non-security allies; Poland also signed a security agreement with the United States in September 2019, explicitly stating that it would not use Huawei 5G network equipment.

It is worth noting that the British government, which had been changing its attitude, finally made a final decision last month and announced that it would stop using Huawei equipment in 5G construction. Although the UK is well aware that the absence of Huawei's technology will inevitably delay the country's 5G network construction, the US ban has forced the British government to change its position.

In addition, although some countries say on the surface that they will not exclude Huawei, they have actually taken measures similar to eliminating Huawei.

For example, Singapore's three major operators, Singapore Telecommunications, StarHub and M1, collectively announced that they have selected Sweden's Ericsson and Finland's Nokia as the main equipment suppliers for 5G networks. This means that Huawei will not be able to participate in Singapore's 5G network construction, which can be said to be a very unexpected result.