Huawei Diminished Expectations for 5G; Struggles in U.S. vs Booming Business Elsewhere

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He noted out that the full 3GPP Release 15 spec – which is expected in June this year – will only address part of future use cases for 5G, which is the enhanced mobile broadband for consumers.

[This author has repeatedly stated that 3GPP Release 16 and parts of Release 15 will be submitted to ITU-R WP5D as a candidate IMT 2020 RIT in July 2019 and NOT BEFORE THEN!]

Xu said the current 4G infrastructure is “pretty robust” and good enough to support most use cases and he doesn’t see many clear use cases or applications which can only be supported with 5G.  Xu is not expecting 5G to be used for nationwide coverage in China (or any other country for that matter), at least to begin with. Instead, he expects 5G to be used for specific, more localized deployments where there is a need for increased speed and bandwidth.

However, he noted, this doesn’t mean it’s not worth investing in 5G. “If you’re not investing in 5G, your customers won’t invest in your 4G,” Xu said.

“It’s the same case for telecoms operators. They are driven by competition, if one telco in the market says, ‘I have 5G-enabled services,’ the other service providers will have to launch 5G, for marketing and branding reasons.”

Xu said Huawei will continue to be committed in 5G investment and the company’s progress in this area is quite “encouraging.”

“By the second half of this year we will launch end to end 5G solution to cater our operators customers who do have requirements for 5G. And we are going to launch 5G-capable smartphones in the third quarter of next year.”

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Huawei’s Struggles in the U.S. vs. Booming Business Elsewhere

Huawei has failed to find a U.S. carrier to partner with for its smartphones, and the Federal Communications Commission this Tuesday approved a draft order that could damage Huawei’s existing business in telecom/network equipment. The order cited Huawei and its Chinese rival ZTE by name.

Huawei’s struggles in the United States are in contrast to its booming business in developing countries and growing presence in Europe, where it has been working on next-generation, or “5G,” wireless standards. The company’s profits rose 28.1 percent in 2017, boosted by strong enterprise and consumer sales and booming business overseas.

The recent setbacks have left Huawei’s future in the U.S. uncertain. Huawei recently let go of several American employees in their Washington D.C. office, including William Plummer, who spearheaded efforts to convince the U.S. to allow Huawei in for nearly a decade. Though Huawei declined to comment on the layoffs, the news was first reported by the New York Times and independently confirmed by the Associated Press.

Huawei and ZTE’s burgeoning 5G research is seen as a particular threat, as its expanded transmitting capabilities are seen as crucial for a host of emerging technologies based on artificial intelligence – including self-driving vehicles, robots and other machines that transmit vast amounts of data in real time.

Apart from expanding its influence in the ITU-R WP 5D, which develops cellular technology standards, Huawei joined forces with European companies to develop pseudo “5G” standards. In February, it completed the world’s first “5G” test call in partnership with London-based Vodafone.

Still, while Chinese trade relations with Europe remain calm, Washington has been warning officials in Canada and Australia about Huawei, raising questions about the company’s long-term global prospects.

“Huawei is perceived differently in Europe but that’s definitely a risk for the company,” said Thomas Husson, principal analyst at technology research firm Forrester. “Let’s not forget Europeans can still try to push in favor of European-based solutions from Nokia or Ericsson.”

10 thoughts on “Huawei Diminished Expectations for 5G; Struggles in U.S. vs Booming Business Elsewhere”

  1. Analyst: China’s Huawei To Exit U.S. Market

    By the end of Huawei’s annual analyst summit held this week in its hometown of Shenzhen, China, the world’s largest telecommunications equipment maker left no doubt that the U.S. market is no longer part of its global strategy.

    Not interested in the U.S. market anymore

    “There are things we cannot change its course, and it’s better not to put it on top of your mind,”said Eric Xu, Huawei’s “rotating” CEO. “In this way, we have more energy and time to serve our customers, and to build better products to meet the needs of our customers. In some cases, just let it go and we’ll feel at ease.”

    The retrenchment comes amid repeated calls by U.S. officials to ban products from Huawei and ZTE, determined to be a risk to national security.

    Latest round of layoffs underway, mainly affecting U.S. workers

    What it means, in practice, is that Huawei will quickly scale down its U.S. operation (sales, marketing and support).

    According to its website, Huawei USA is headquartered in Plano, Texas, and employs about 1,200 people across 13 regional offices, including Silicon Valley, Bridgewater, New Jersey, Chicago and San Diego.

    The Chinese manufacturer has thousands of U.S. customers, from regional carriers to small businesses and consumers, that still need support and assistance while they replace their Huawei equipment with alternatives from Ericsson, Nokia, Cisco or others.

    Huawei’s consumer business which includes smartphones, tablets, laptops, and wearables is essentially already shut down after the company’s decision to not sell its latest P20 flagship phone in the U.S. and after losing distribution deals with AT&T and Best Buy.

    https://www.forbes.com/sites/jeanbaptiste/2018/04/19/analyst-chinas-huawei-to-quit-u-s-market/#401b92c811cb

  3. Great article. It’s refreshing to see a senior executive with a grasp on reality.

  4. IMT 20/20 5G production networks are at least three years away any carrier rollouts before then are proprietary and vendor specific . That means that a 5G handset or endpoint designed for one carrier Network won’t work on a different carrie’s nietwork

  5. WSJ-China’s Huawei Is Determined to Lead the Way on 5G Despite U.S. Concerns:

    Huawei is sending large teams to industry-sponsored meetings…Huawei representatives are swamping such conferences with recommendations for how the new 6G system should work, leveraging the company’s large research-and-development budget and its growing workforce of skilled engineers, according to meeting attendees and outside analysts.

    “5G will be made in China,” said Dimitris Mavrakis, a director at ABI Research.

    Representatives from Chinese companies now hold 10 of the 57 chairman and vice chairman positions on decision-making panels at 3GPP, Huawei has been a leader in 5G-standards submissions to the specifications-setting consortium, according to early tallies. As of early 2017, it had submitted 234 contributions to 3GPP, compared with runner-up Ericsson’s 214, according to the latest data available from wireless-patent developer InterDigital Inc.

    Huawei said Friday its research-and-development budget rose 17% last year to $14.3 billion. That is more than the combined 2017 total for Ericsson and Nokia, which respectively spent $4.6 billion and $6 billion, though, unlike Huawei, neither has a major consumer business.

    U.S. leaders have made clear they are trying to prevent a world in which most telecom electronics are made by Huawei and its Chinese peers, fearing Beijing could spy, steal trade secrets or cast cyberattacks through them. A Huawei spokesman says the company is employee-owned and that no government has ever asked it to spy on or sabotage another country.

    https://www.wsj.com/articles/washington-woes-aside-huawei-is-determined-to-lead-the-way-on-5g-1522402201

  6. “We do have expectations on 5G, but maybe those expectations are not as big as some people might think,” said Xu in his keynote. “5G is just one product line at Huawei. It is a just a natural evolution of the technology from 2G to 3G to 4G and now 5G.”

    With the infrastructure for 4G remaining perfectly acceptable for most use cases, Xu is expecting 5G not to be used for nationwide coverage – at least not to begin with. Instead, Xu expects 5G to be used for specific, more localised deployments where there is a need for increased speed and bandwidth.

    https://www.telecomstechnews.com/news/2018/apr/17/huawei-ceo-5g-expectations/

  7. Chinese telecom giants Huawei and ZTE face market pressures amid US scrutiny
    Hello Tech Lovers, so you might know that ZTE is banned in the USA and now ZTE will not able to import or use any product that is made in the US. This might be a result of USA China trade war. So in this video, we are going to talk how ZTE Phones will be impacted by this ban. So as ZTE mobiles are used everywhere in the world, it is a giant mobile manufacturer which manufactures 12% of the smartphones in the US, and certainly the U.S. Commerce Department’s Bureau of Industry and Security placed a ban on ZTE saying it has broken the settlement agreement. So now the two major parts of ZTE Smartphones that are imported from the US are the chip which is from the house of Qualcomm and is the largest mobile platform manufacturer due to its quality products. So now ZTE phones will not able to use the Qualcomm Snapdragon chips in their devices because of this ban. Also not to forgot that the Android itself is being developed by Google. Which is a US company and well known search engine. So now Google has kept android as an OpenSource platform. This allows ZTE to use Android on their mobile phones. But the other products like play store which need an agreement with Google, ZTE will not able to install them on those devices. So what is the future of ZTE? Will US remove the ban from ZTE or it will get bankrupt? How will ZTE cope up with this ban? No one has the answer right now. Who knows what is in the fate of ZTE and China. Let’s see if USA removes the ZTE Ban.

    https://www.youtube.com/watch?v=IEjLzKIsgCA

  8. India, US and China can significantly impact 5G device market- MOBILE BROADBAND NOT VZ plan for Fixed Broadband Access

    What kind of trends do you see emerging in the 5G space in 2018?

    In the first phase of 5G we expect that mobile broadband would be enhanced. We see this happening from the industry, typically from device point of view where we see CP routers coming up this year. We expect in 2019, 5G smartphones will be launched. This is maybe the first entrance towards 5G. This is as well what we see from standardization perspective, from typically 3GPP that this is what they are targeting right now. In second phase you could see in 2020 or later where we will be trained to address verticals to use 5G as a platform. For the next two years we will mainly be trying to target eMBB (enhanced mobile broadband).

    https://telecom.economictimes.indiatimes.com/news/india-us-and-china-can-significantly-impact-5g-device-market-huaweis-emmanuel-coelho-alves/64318547

  9. Sanyogita Shamsunder, vice president, 5G Ecosystems & Innovation for Verizon. “Verizon continues to lead the way toward the realization of true 5G technology.”

  10. Huawei Technologies, the world’s largest telecom equipment vendor that has faced recent business setbacks on security concerns, believes a unified security standard for the next generation of mobile technology – 5G – that all global participants must comply with would help to resolve politicization of the technology’s roll-out.

    All countries need to recognise the importance of setting better common standards, adopting industry best practice and implementing risk-mitigation procedures to ensure that there is an objective basis for choosing technology vendors, said Andy Purdy, chief security officer of Huawei USA, in a video interview from this week’s Singapore International Cyber event.

    Taking politics out of the decision-making process is vital “so there’s an open, objective, and transparent basis for trust, so that the users can trust it, the government can trust it, and the vendors can know what the requirements are,” he said.

    Shenzhen-based Huawei works with all of Australia’s major telecoms network operators and more than 50 per cent of Australians use a device from the Chinese company for some part of their daily communications needs, according to a description on its Twitter account. However, Huawei and ZTE Corp, Chinese telecommunications equipment providers that have both invested heavily in research and development of next-generation networks, were both excluded from building Australia’s 5G infrastructure after Canberra laid out new rules in August, citing national security concerns.

    China expressed “serious concern” about the Australian government’s action, according to a statement from Chinese foreign ministry spokesman Lu Kang. Meanwhile, amid an escalating trade war between the United States and China, the US government has identified Huawei and ZTE as security threats because of alleged ties to the Chinese government.

    Unified objective security standards that are applicable to all markets and spread around the world could be “a very good thing,” said Purdy, who served as the director of the National Cyber Security Division of the US Government’s Department of Homeland Security between 2004 and 2006.

    Following Canberra’s new guidelines, which bar the involvement of vendors “who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law”, Huawei said in a subsequent statement that the decision was made on “political grounds that undermine fair trade and hurt the interests of local consumers”.

    Purdy said it’s important to sort out how to assess and address risk in relation to 5G in order to ensure that all vendors can meet objective functional, quality and security requirements.

    “The more clarity we get, the more likely we’ll be able to say at some point that – these things are necessary and that we can do them, and that we can show that we can do them,” said Purdy, adding that all vendors need to be able to demonstrate they can meet the requirements objectively.

    Frank Mademann, a Huawei employee who is also the Elected Chairman of Architecture Workgroup at 3GPP – the organisation that sets standards for the world’s telecommunications industry, said in the joint video interview that unlike the different types of standards adopted for past mobile networks – two for the 4G networks – 5G could be the first time the entire world has a single standard and a unified understanding from global participants about security needs.

    “5G standards are designed (and will continue to be optimised) to make 5G safer than 4G,” said Mademann, who added that the next generation network offers more protections around subscriber identity, safeguards the interconnections between different carrier networks and will become even more difficult to crack as it adopts better encryption methods.

    https://www.scmp.com/tech/article/2165175/huawei-executive-says-unified-objective-security-standard-needed-take-politics
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    OPINION: Australia should reverse its Huawei 5G ban:
    https://www.scmp.com/tech/article/2164104/opinion-australia-should-reverse-its-huawei-5g-ban

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