Technicians from South Korean telecom operator KT verify an antenna for the 5G mobile network service in Seoul.
TOKYO: With mounting pressure to keep China’s Huawei out of 5G network development, it may be time for companies like NEC in Japan and Samsung in South Korea to shine.
Washington has pressured its allies to ban Huawei, a Chinese telecommunications giant, from building next-generation 5G mobile networks, claiming that its equipment can be used to spy on Beijing.
Huawei denies the charges, but US pressure has prompted a turnaround in Britain.
The government has already pledged to remove the company from the most sensitive “core” elements of 5G that access personal data, and is now allegedly pushing for plans to end Huawei involvement in Britain’s 5G infrastructure to 2023.
But excluding Huawei is not without challenges, because there are currently only two alternatives in Europe for 5G equipment, such as antennas and relay poles: Nokia from Finland and Ericsson from Sweden.
Britain has encouraged Washington to form a club of 10 democratic nations that could develop their own 5G technology, but so far there have been few moves.
“The vast majority of commercial networks sold in the world come from the Big Three,” said Sylvain Chevallier, in charge of telecommunications at consulting firm BearingPoint, referring to Huawei, Nokia and Ericsson.
“But a world of three is not good for operators, and if it is reduced to two, it will be even worse,” he told AFP.
– Forming teams –
That leaves a tantalizing potential opening for telecommunications companies like Samsung and NEC. But building a successful 5G network is not a simple task.
That is a lesson that Samsung has already learned. Despite being a major player in 3G, he found himself unable to compete with the Big Three in 4G and struggled to win commercial contracts.
“This has been a challenge for Samsung,” said Daryl Schoolar, mobile technology specialist for the Omdia consulting group.
In building its 5G network, Samsung has so far focused on North America and parts of the Asia-Pacific region.
“So while operators may feel insecure about Samsung Networks, they are much more advanced in the process of being a global presence than NEC,” added Schoolar.
NEC has some advantages, including a partnership in Japan with mobile operator Rakuten.
The companies have already cooperated on a 4G network and are now jointly developing a 5G system.
The Japanese firm is also a leader in submarine cables, fiber optic networks and, thanks to its subsidiary Netcracker, logistics management software.
“Netcracker has a strong presence with operators in Europe, which could be a real entry point for NEC,” said Stephane Teral, chief telecom analyst at LightCounting, a market research firm.
– ‘A great challenge’ –
NEC is very confident in its contracts for mobile networks, and only says that it is conducting feasibility demonstrations for “various clients and we are involved in business discussions with others.”
The British government has reportedly asked NEC and Samsung to participate in protests as it seeks to diversify its 5G options.
And on Thursday, NEC announced a link with Japanese operator NTT intended in part to accelerate development of a 5G network.
Samsung and NEC joined forces two years ago and have launched a joint marketing team to offer 5G products to the European and Asian markets.
Still, the road ahead will be difficult, Schoolar said.
“I think it is a great challenge for NEC. It requires more than radios, it requires investing in people who can do systems integration, sales, customer service, network design and engineering,” he said.
“In addition, NEC will need to build confidence in operators that they will be there to support them in five to 10 years as those 5G networks evolve.”
Washington has endorsed the use of non-proprietary technology like Open RAN in 5G development, hoping it will provide an entry point for American companies.
Such a move would open up opportunities for NEC, allowing them to “create an economic model that would shake up traditional equipment manufacturers,” Chevallier said.
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