Trump announces 5G plans

The United States releases plans for an auction of radio spectrums to support its 5G ambitions amounting to US$20.4 billion. 

Background

5G (from "5th Generation") is the latest generation of cellular mobile communications. It succeeds the 4G (LTE/WiMax), 3G (UMTS) and 2G (GSM) systems. The unique selling point of 5G networks is its capability to achieve much higher data rates than previous cellular networks, up to 10 Gbps; which is faster than current cable internet, and 100 times faster than the previous cellular technology, 4G LTE. Another advantage is lower network latency (faster response time), below 1 millisecond, compared with 30 - 70 ms for 4G. Because of the higher data rates, 5G networks will serve not just cell phones but are also intended as a general home and office networking provider, competing with wired internet providers like cable.   

Development of 5G is being led by companies such as Qualcomm, Huawei, and Intel for modem technology and Nokia, Ericsson, ZTE, Cisco, and Samsung for infrastructure. Huawei Technologies is the largest telecommunications equipment manufacturer in the world and is a world leader in 5G technology.   

Huawei is under investigation for potential violations of US sanctions against Iran. President Trump and American lawmakers have repeatedly accused the company of being a threat to US national security, arguing that its Huawei-made telecommunication equipments may be designed to allow unauthorised access by the Chinese government and the Chinese People’s Liberation Army.

Analysis

The United States recently announced the largest ever auction of a radio spectrum to support the development of 5G. President Trump and the chairman of the Federal Communications Commission (FCC), Ajit Pai, also announced a US$20.4 billion investment in a Rural Digital Opportunity Fund to introduce high-speed broadband networks to previously overlooked rural areas. Mr. Trump said, “We cannot allow any other country to out-compete the United States in this powerful industry of the future…The race to 5G is a race America must win.”

The move is a part of the FCC’s Facilitate America’s Superiority in 5G Technology program (5G FAST plan) that aims to introduce more spectrum into the free-market, update infrastructure policy and modernise outmoded regulations. The goal, as elucidated by President Trump, is for the United States to operate more 5G spectrum than any other country.

The United States has historically maintained a sizeable advantage in telecommunications technology, often setting the pace for development and deployment. However, in the race to 5G, the United States has faced significant challenges from Chinese companies that are capable of developing and deploying the product at a fraction of the cost that America can. The American intelligence community believes that Huawei’s 5G gear would actively aid Chinese intelligence, and has made this perspective a cornerstone of their National Security Policy. 

Portraying Huawei’s alleged record of corporate wrong-doing as prolific is the first step towards America’s strategic plan. This is evidenced by the arrest of a senior executive of Huawei in Canada at America’s behest. Playing up the potential for security breaches, America will increase pressure on its strategic allies to shy away from Huawei’s offerings, bringing business to traditional telecommunication industry stalwarts such as Nokia, Ericsson and Samsung. However, these steps are only likely to yield the intended result if America develops its own 5G platform, as evidenced in the recent announcement by American authorities.

The United States is likely to introduce private sector initiatives in order to facilitate innovation in the sector. The primary concern at this time remains to make less-crowded bandwidths of the radio spectrum available to private carriers, who, in turn, will deploy the technology. However, analysts have pointed out that the plan has not outlined any new ideas that might aid the growth of 5G in the US. It is more likely that the event at which the plan was announced was aimed at posturing the American perspective while in the throes of a strategic battle for primacy of the global telecommunications industry. 

Assessment

Our assessment is that the ubiquitous nature of the telecommunications industry in modern times means that global superpowers will fight over their dominance of the sector. We believe that America’s government, despite currently playing catch-up to other countries such as China and South Korea in the 5G sector, wants to send a message that it is serious about its engagement in the revolutionary technology. We believe that the FCC’s 5G FAST plan is a positive step, although rolling out the measures quicker must be central to the initiative. From a technical perspective, we believe that for America to catch-up they must release more of the mid-band spectrum as opposed to the recent millimetre wave spectrum announced by President Trump and Mr. Pai. We believe that although the mid-band spectrum is slower, carriers can use existing infrastructure to deploy the service in a quicker, easier and cheaper manner. 

Image Courtesy: https://upload.wikimedia.org/wikipedia/commons/8/82/Manzbau_Betonmischer_Mobilfunk-Antennen.jpgIkar.us [CC BY 3.0 de (https://creativecommons.org/licenses/by/3.0/de/deed.en)]

 

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