Huawei And ZTE Inclusion In 5G Trials

 By Brig. Akhelesh Bhargava
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India may not be the first one to switch over to a new technology.  But once introduced, the rate of adoption of new technology by the Indian populace becomes the fastest.  This has been proven time and again for 2G, 3G and 4G.  The world telecom companies do not want to miss the roll out of 5G network in India as it will provide billions of dollars in revenue.  In a surprise announcement, the Telecommunication Minister on 30 Dec 2019 stated that the regulators are going to conduct trials for 5G rollout and have asked for fresh bids from telecommunication companies within 10 days (by 10 January 2020).  Trials for 5G services in India were first scheduled for January 2019 but were delayed on modalities such as pricing and tenure.  What is surprising is the changed stance of allowing the two Chinese companies viz, Huawei and Zhongxing Telecommunication Equipment (ZTE) to participate in the trials.  The Minister also stated that, ‘by allowing these companies to participate in trials; does not necessarily mean that they will be given final order’.

Chinese Ambassador to India Sun Weidong was first off the block and tweeted, welcoming the Indian Government decision. He stated and hoped that, “Chinese companies will continue to enjoy open, transparent business environment and level playing field in India for win-win cooperation”. “Glad to know all players got equal chance to participate in 5G trial in India”.  China was looking for a window of opportunity and it has got it.

Along with China, US and South Korea, among other major countries, are ahead on testing 5G, while ‘India has its own set of challenges to address’. Whatever be the outcome of the trials, some analysis is a must to understand what it entails to allow the Chinese companies to participate and the related security concerns which have been raked-up before and remain a point of concern.

 Implications: Allowing Huawei for Trials

To state that by allowing Huawei for trials; ‘does not imply that they have been allowed to do business or they have been given access to core areas’; is far from reality.  China as we see is always on the lookout for such opportunities because it knows that it is ready – with the equipment, at lowest cost, for all eventualities / scenarios that are likely to be set for the trials.  It will be for the first time when Chinese companies are being permitted upfront to participate in Indian Government conducted trials. Is it because China had recently stated that, ‘if India does not allow Huawei in 5G trials, it will have serious economic consequences’?

On the other hand the Indian companies lag far behind in this field as the dwell / lag time is much more.  For Chinese companies it is ‘act first, get a foothold and calculate cost later’ whereas for Indian companies it is vice versa – ‘calculate cost first and act later’.  It seems that in 10 days, only the Chinese companies would be ready for the trials or the Indian companies would be fielding equipment produced by Samsung / Ericson; which anyway is much costlier.  Globally there are approximately 50 companies which are into 5G equipment manufacturing.

Advantage to Chinese Companies

The world is aware that as of now, Huawei has raced ahead of others as far as operationalisation of 5G is concerned.  Companies like Samsung and Ericson too have been left far behind as far as 5G equipment deployment is concerned.  By giving just 10 days for trials to commence; Huawei would be the lone ranger during the trials.  Huawei has following advantage over others: –

–           Pipeline for 5G equipment manufacture in both 3 to 3.5 GHz (S band) and 26 GHz (Ka Band) already exist.

–           4G equipment is being supplied indirectly through Indian companies by Huawei and it is aware of the Indian company’s shortcomings in manufacture of telecom equipment.  The under time pressure trials will further enable it to exploit the situation.

–           In case India decides to use 3 to 3.5 Ghz frequency (S Band), Huawei will be first off the block as it is already geared up to modify the 4G products (being used in 2 to 2.5 Ghz band).

–           For China, the base already exist in India; with mobile sets from companies like One Plus, Oppo, Vivo, Xiomi, Real Me, etc; all flooding the Indian markets.   The wholesale and retail markets exist and induction and adoption of changing technology will be that much easier and faster for the tech savvy Indian populace. These Chinese mobile manufacturers will be able to generate fastest revenue for China.

Cost Factor

By cost cutting, what Jio did to Vodafone/Idea and Airtel; Huawei will do to all Indian telcom companies.  The mass production capability of Huawei cannot be compared and will be difficult to match.  Huawei is expected to provide 5G kit at a fraction of cost of what the next cheapest has to offer.  India being a democracy; the present Government will have great difficulty in making the populace understand the security concerns vis-s-vis cost factor.  Besides, organizations such as Swadeshi Jagran Manch (SJM) have already expressed their annoyance in permitting Huawei for the trials.

The Government has also not clarified, whether Indian companies are allowed to use Huawei equipment for the trials.  If it does, then it is a super win-win situation for Huawei.  Government will however have to codify the security aspect in greater details.

As India telecom companies hackle and carry out price wars with each other resulting in suffering business losses; Huawei has a revenue growth of 18 percent despite US sanctions.  China is very eager to offset its revenue loss from US with gains from India.  Getting the news about permission for participation in trials is indeed like ‘icing on the cake’ at this juncture.

Security Implications for Permitting Chinese Companies in 5G Trials

The Chinese are adept in data collation and intelligence gathering.  In fact 5G aids Artificial Intelligence (AI), Data Analytics, Big Data Mining and Machine Learning are fields which will benefit from 5G and China is well ahead in them.  The Chinese companies have a bond to inform Chinese Government about, ‘any information that may be of use for national security’ or in other words carry out espionage.  During the trials many questions will be asked and so many aspects will be disclosed willy-nilly during informal talks. These may include the following: –

  •  The frequency and quantum of bandwidth allocation for various zones will be made known including usage of different bands such as S and Ka band.  It will enable Huawei and ZTE to concentrate in lucrative sectors where mobile penetration is most.
  • Reservations expressed by the armed forces on certain frequencies because same frequencies are being used in certain equipment such as Surveillance and Tactical Air Defence Radars.
  • The blockage of the above mentioned frequencies would inevitably reveal the specific frequency / band of frequencies being used by Indian military, especially in Ka band,
  • Degree of interference experienced during trials in specific areas while using certain frequencies.
  • Feature identification of the equipment being used in trials by other companies including Indian.
  • Prioritisation of urban, semi-urban, rural and border areas in rolling out of 5G network.
  • Given the ability of Chinese snooping activity by sending in military personnel in garb of civilian technical workers, own intelligence agencies will have to work double time to detect them.
  • 5G being 100 times faster; uploading and downloading files will be extremely fast.  To stop data transfer of files of military significance midway will be that much more difficult.

Conclusion

 It is good to have competition, agreed that time is of significance but why suddenly this hurry?  Are the Indian companies ready to participate in trials and will they be able to prove their worth in comparison to what Huawei and ZTE has to offer.  Knowing fully that the competition is not going to be fair or on a level play field; Indian companies may feel that, ‘there is no point in spending time on trials’.  The US, Japan, South Korea, Australia and others have not for naught decided to shun Huawei and ZTE.  Are we going the right way or are we falling into a trap; only time will tell.  Being part of intelligence agencies in a democracy is so much difficult at times.  Does it also mean that in short or mid term, India will also agree to join Belt and Road Initiative (BRI)?  Will it also resort to choosing Chinese Beidou over US Global Positioning System (GPS) for navigation purpose?