Gaining Competitive Advantage While Securing the Country and its People : 5G Challenges for India

 By Gaurav Gupta
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Introduction

In telecommunications, 5G is the fifth generation technology standard for broadband cellular networks, which cellphone companies began deploying worldwide in 2019. Due to the increased bandwidth, the 5G networks are expected to be used as general internet service providers and will also make possible new applications in the internet of things and machine-to-machine areas. A world leader like the US would like to maintain a competitive edge over others in the implementation of 5G. A report titled ‘America’s 5G Era: Securing Its Advantages and Ourselves’ has analysed the US standing on implementation of each component of the 5G ecosystem. The report is co-authored by Mr. Timothy M Bonds, and 11 others at RAND Corporation, which is an American nonprofit global policy think tank. The authors have assessed the 5G wireless ecosystem, and see the development of 5G markets and technologies as an enduring competition rather than a ‘race’. The perspective of the paper is based on economic competition, technical competition, security competition, and competition between big data and individual privacy.

5G network ecosystem is divided into four broad components. The first component is applications and services and is also related to data about people and enterprises including their activities, preferences, relationships, and consumption behavior. The second component is 5G hardware and software i.e. operating system and chipsets for mobile phones and mobile devices themselves. Mobile and backbone Network is the third component of 5G consisting of cell towers, base stations, and core network equipment like switches, routers, and servers. Precursors are the fourth critical 5G hardware and software component which includes chip fabrication facilities and instruction set, developers.

Now how is the US fairing in this competition?  The US has dominated the application and service segment with US-based companies like Alphabet, Amazon, Microsoft, and Facebook. The leadership of the hardware segment has changed hands dramatically in the last 20 years from Nokia, Motorola, Ericsson to Samsung, Apple, and Huawei. The Operating System market is dominated by the US with Google’s Android and Apple iOS. It has accrued a huge economic impact including jobs and tax revenue. Some Chinese companies like TikTok are now entering this segment and rapidly gaining users and their data.  CISCO has almost half of the ethernet switch market, which is the key core network equipment worldwide, with Huawei a distant second at 2%. Dell has 17% of the Server market worldwide. The US companies have exited the Radio Access Network equipment business which is now entirely served by foreign entities with Huawei commanding the largest share of the market at 31% followed by Ericson and Nokia. The market for the new 5G ecosystem in the US appears to be strong.

Recent erosion has taken place in mobile chip design which is now manufactured at few large foundries in Taiwan or South Korea. The foreign market also dominates the market of high-end lithography equipment to make leading-edge chipsets and instruction coding. This could lead to potential supply chain disruption and affect the technical competitiveness of products made in the US. The US is also significantly behind many other countries on spectrum licensing, particularly in the mid-band which will be used by 5G networks. In addition, Chinese companies have cultivated a leading role in the cognizant committees like the third Generation Partnership Project acronym as 3GPP that set technical standards in each region of the world, providing them a pathway to insert a back door to exploit later or to ensure that privacy can be compromised. In the 5G era, more than 13 billion mobile wireless devices with built-in cameras, microphones with Siri, Alexa, or equivalent, and location trackers are projected to be in service worldwide which will make surveillance at an individual level truly ubiquitous. Privacy can be compromised by the collector of data or by governments to track, bully and harm individuals.

What it means for The US

The US will prefer that the user’s data remain in the possession of the US-based corporations to regulate its collection. Hence there is a need for an updated protocol coordinated across government and industry. Policymakers need to pay close attention to how future 5G networks, systems, and applications will be secured and who will control its access to third parties and law enforcement and intelligence agencies. The US must continue the current ban on compromised equipment in the US networks. The US also needs to develop a clearer strategy to secure the supply chain in market segments that the US-based companies have exited. This is to address threats against potential points of failure by incentivizing both US companies and friendly foreign suppliers to build leading-edge mobile chip foundries in the US. The US should consider options for encouraging Radio Access Network equipment makers that offer alternatives to Chinese manufacturers. A new initiative among Radio Access Network hardware and software providers to develop open standards for the next generation of Radio Access Network systems could lower the entry barriers for new participants.

It is vital that the industry and government in the US maintain leadership in 5G technologies by maintaining a thriving technical base and continue to be a major source of ideas and invention, with entrepreneurs able to quickly seize opportunities as they emerge. Investment in research and development, access to venture capital, and preparing a skilled workforce should be high on the list of resources needed to enable a thriving 5G ecosystem. The US needs to establish and maintain leadership in a wide variety of technologies including rapidly emerging technologies, such as artificial intelligence, the internet of things, and machine learning.

What It Means for India

India is the most fertile market for 5G adaptation and needs to leapfrog and embrace emerging technologies and infrastructure. Being an expanding economy, India has a robust demand. Large equipment manufacturers like Nokia, Huawei, and Ericsson are conducting trials with major service providers including BSNL, Airtel, Jio, and Vodafone-Idea. There is a huge gap between the current deployed BTS capacity compared to the requirement for the successful rollout of 5G. In addition, each TELCO has to seek Right of Way from the State Government or Central Government authorities. There is a need to adopt global policies to resolve the structural issues and put a strong policy framework in place before the 5G network is rolled out in India. Affordable 5G devices are yet to be available in the Indian market due to the lack of a world-class indigenous semiconductor fabricating facility. India is a preferred destination for IT and BPM in the world. India’s IT and telecom sector has strong policy support from the Government. It is a perfect time for the government to either get global players to invest in India or to build indigenous 5G solutions by giving impetus to investment in semiconductors, Operating systems, and future technology under ‘Make in India’ and ‘Digital India’. This will also ensure that there are no supply chain disruptions. For core network equipment India must propose ‘techno-democracy’ alliance by shaping the norms that govern the use of technology and push back against countries that can be termed as “techno-autocracies.”

It is expected that creating this infrastructure will need huge investments. In the background of very aggressive competition, tariff wars, and massive investment requirements on spectrum auctions, investments in infrastructure will be hugely challenging. The government needs to partner with investors and TELCOs to help build shared infrastructure through different business partnering approaches. Ever since cloud-based data storage has no physical boundaries, the 5G operators cannot safeguard user data in the cloud environment. India must push the Personal Data Protection law to safeguard its citizen’s data.  There is a reasonable assurance on availability of spectrum although pricing and affordability of same are still to be decided. It is expected that India will be able to meet the global timelines for rollout and might exceed many developed economies.

In the 21st century we are living in the information age where information blended with technology is the primary driver of any nation’s prosperity and security. 5G-era technologies will directly impact India’s economy and society. It is a race that first movers will dominate over all others and this dominance will provide enduring economic and technical benefits by job creation and leadership in technology innovation. Finally, 5G will ultimately be the foundation for 6G and future cellular generations. The nation that leads the world in wireless technology wins.