Can anyone fill the Huawei void? | Inside Story

the uk is reported to have turned to japan in its search for 5g network technology but can anyone fill the huawei void and what does it mean for the timeline of 5g services this is inside story [Music] [Music] hello and welcome to the show i'm sami zaydan now the uk is reportedly asking japan to help build its 5g infrastructure it's seen as a major blow for chinese technology and a win for u.s president donald trump the uk says it's banning china's huawei 5g from its networks the british government says the decision wasn't easy but is right for national security and the economy the move comes as the us intensifies its campaign against the tech giant and it reverses the uk's attempt in january to allow restricted use of huawei equipment from the end of the year uk operators will not be allowed to buy the firm's 5g kits gear already in place have to be removed by 2027. well this is what the uk's digital secretary had to say the new u.s measures restrict huawei's ability to produce important products using us technology or software the national cyber security center has reviewed the consequences of the us's actions the ncsc has now reported to ministers that they have significantly changed their security assessment of huawei's presence in the uk's 5g network given the uncertainty that this creates around huawei's supply chain the uk can no longer be confident it will be able to guarantee the security of future 5g huawei 5g equipment affected by the change in u.s foreign direct product rules to manage this risk they have now issued new advice on the use of huawei in uk telecoms networks well china is accusing the uk of colluding with the us to hurt chinese companies it's warning it'll come at a cost without any concrete evidence the uk used the unfounded risks as an excuse and cooperated with the us to discriminate against suppress and exclude chinese companies the uk blatantly violated market principles and free trade rules and breached the relevant promises they made the wrong decision seriously damages the interests of chinese enterprises and severely impacts the basis of mutual trust in chinese british cooperation china strongly opposes this the uk's decision raises questions about whether other european countries will follow suit u.s president donald trump has been pressuring allies to exclude huawei from their networks some have already dismissed the firm others are considering doing so trump says the tech giant could be used by the chinese government to spy on countries huawei denies the allegations trump's already imposed an outright ban on the firm in the u.s and introduced new rules to disrupt huawei's ability to manufacture its own chips american visa restrictions have been recently imposed on employees of chinese technology firms deemed to be human rights offenders trump says the race is on for 5g and the us must win it huawei is part of a wider economic and political dispute between the u.s and china the two countries have been engaged in a trade war and imposing tariffs on each other's goods since 2018 they agreed on a first step towards a truce and signed a trade deal in january china promised to open up its markets to american goods in exchange for a partial lifting of u.s tariffs but tensions resumed soon after the u.s accused china of suppressing information about coronavirus beijing rejects that allegation there are also ad odds over china imposing a national security law in hong kong uyghur muslim minority human rights violations by the chinese government and beijing's claims in the south china sea let's bring in our panel we have joining us from adelaide australia simon lacy he's a former vice president of global government affairs at huawei technologies in shenzhen china in chamonix france we have robert prichard he's a cyber security consultant and former deputy head of cyber security operations center in the british government and in tokyo we have mark einstein he's the chief analyst for digital services at itr japan welcome to you all if i could start with mark in tokyo so can even giants like nec and fujitsu fill the void by shunning huawei as the uk is doing so they absolutely can i mean nec is not incredibly successful overseas but is the number one supplier to the number one company in japan which is ntt docomo um and fujitsu's telecom business has not really been very strong in recent years but they just want a big deal with dish in the united states so uh while they might be more expensive and less inexperienced i do think that from a technological perspective they would be able to fill that gap simon do you agree with that perspective has everyone been making too much of a fuss about their whether or not there is life after huawei in the 5g world well i think there's definitely um life after huawei i mean you've already got some vendors um in the space well established like nokia and ericsson samsung has actually long been that sort of company to watch uh in this space um but uh look i mean nec is coming from so far behind um it's hard to really see how um it could really uh change the dynamics in in in the uk market i mean if you're talking about the uk market um now you're going to have um you're going to have fewer vendors less competition and and you're also delaying um the rollout quite significantly and that could have that could have some serious long-term implications on on sort of the competitiveness of the uk um but this is a decision that the uk government has now taken at least for the foreseeable future and they'll have to live with that i could see mark shaking his head in i guess disagreement what do you take exception to isn't it a fact that nec like others they are pretty much everybody is behind huawei well i mean in terms of market share yes i i would agree that huawei is the number one player in in the global telecom infrastructure market in the world but i think that nec has been you know the main supplier of ntt docomo which has been the pioneer in 3g and 4g services and now 5g services so to say that they're behind technologically i think is incorrect um to say that they don't have anywhere near the footprint of huawei is correct all right let's bring in uh robert if we can robert there is a belief that aside of the argument of whether it's possible to go on building a 5g network with or without huawei that this decision anyway is more motivated decision of the uk for political reasons rather than real cyber security concerns is that how you see it um i think in part probably yes at the ncsc the national cyber security center in the uk changed their posture as you said in your introduction um from uh thinking huawei was a manageable risk um and then after the sanctions um the u.s announced that they decided that because it restricted or always access to technology um that they wouldn't be able to maintain an appropriate security posture so i i think that's probably i think that's legitimate it's fair to say that if you are denied access to some of the cutting-edge chip technologies then you probably are going to struggle at least um in the short or medium term to to keep your products up to date but i suspect there probably is um the politics behind this as well um you know there's obviously been a lot of pressure from the us and i think there's as again you said in your introduction the deterioration of the relationships with um the national security law in hong kong which obviously is of a significant concern to the uk government as as well as the weaker situation i'm sure would have had influence all right simon you mentioned there that this kind of move means the uk is going to have to push back its rollout dates or it's going to delay 5g technology by how much well i mean uh so uk officials have said that this could be you know anything from sort of two to three years some in the industry think it's it's going to be longer um i think it was bt that went on record and said there's no way that they could rip and replace their uh their highway equipment in in the in the time frame set but um this is this is going to be a significant setback for um for the uk i mean you have to you have to think that the the countries that are really pushing ahead with all the sort of the iot applications and the fourth industrial revolution are korea uh germany and and japan and and um certainly germany and and korea were not allowed were not about to let um their uh let let um their competitiveness be be impacted by any sort of delay in in 5g by um by adhering to u.s pressure in on banning huawei which is which is the most cost effective the most technologically advanced um competitor in the space at least right now that's interesting so we're looking at perhaps some countries being years behind mark will this effectively then create a two-tier world when it comes to 5g technology those using huawei and those who don't who are maybe two three years behind the others so i do think that we might see something of a 5g cold war where we have you know countries that are willing to accept chinese technology in countries that aren't um i certainly you know clearly huawei will continue its you know innovation in in china it's very strong in the middle east in certain parts of africa southeast asia and latin america that's going to continue i think the real battleground is going to be in continental europe where it's about 50 50. so that's really where we're going to see this war uh i think as it's at its hottest this war robert is supposed to be about cyber security at least that's the official reason right but have any of the huawei alternatives been subjected the same sort of rigorous testing that huawei products have been subjected to to make sure that they are more secure no they haven't that's a fair comment so the huawei in the uk has what's called the cell this cyber security center which is staffed by vetted uk individuals um to review the code um and they found lots of problems in huawei code although they've never found a smoking gun that says they were put there by the state but clearly none of the other players have been subject to that kind of review but that said i think you know it comes down in some is that one trust um yeah it is but equally i i think um you know we we should expect that as as the players become more prominent they will be subject to review and of course people do do security reviews of equipment as well it's perhaps just not quite as public you know the huawei the the security reviews of huawei the board make an annual report um so we know roughly they don't necessarily provide all the detail but we have an include um of the kinds of security issues that they're seeing and it's it's not a typical for a large enterprise telecommunications kit it's not a sector that has a stunning reputation for security generally um for a variety of reasons one of which of course is the longevity of the equipment once it goes into your network it's there for a very long time and you know new vulnerabilities are found and new technologies come along so i don't i mean i think that you'll have that the price is more of a degree of trust though i think even if you find the same vulnerabilities um you may have more trust in nokia or ericsson or um a korean company i forget who we were talking about um not exploit those samsung something yeah so you you know they may have a bit more inherent trust in those organizations um to to fix those and perhaps not exploit them in the same way as one might might worry that huawei would simon looking at the bigger sort of global picture the picture that i think you used to have to to look at for huawei is this is the uk decision can we call it a decisive victory for the us in the battle against huawei well i think look um nothing's really decisive i mean this decision has gone back and forth several times over the last year and and you know last year we had a very sort of evidence-based transparent um infrastructure telecom sector infrastructure review with with dozens of experts from all across the spectrum that came and testified and the decision was was um taking the f the finding was made that um that huawei uh didn't didn't represent um a risk that couldn't be mitigated and now we've sort of gone back the other way and i think i think look you have to be realistic that a lot of this is due to i think i think it was robert that alluded to some politics and i think you know you've got you've got one set of political factors in in in the conservative party in the uk um and then you've got another kind of elephant in the room um in in washington with um a president really fighting for his political life uh and um taking stepping stepping up to china and becoming more belligerent towards china is just part of you know the american presidential silly season of politics and and i think once we get to november and january um we might find um uh a new reality regardless of whether trump is re-elected or we have somebody else in the white house well explain the last part if you could simon i can understand if there is a change in the white house but why regardless of that well you have to look at it like this right so i mean if if let's say joe biden gets elected um he's going to get elected on a platform that's also fairly um fairly aggressive towards china but i don't think he's going to try and eviscerate any of the chinese sort of national um corporate champions if trump gets re-elected he's going to have to um reconcile with china just you know for the for the economics that that um that that represents and and um he's going to have to get his his phase 2 trade agreement passed and and he's going to have to engage with with china constructively do you see some of these restrictions being rolled back simon ultimately is that what you're saying well well you know trump has always treated huawei just as a negotiating chip and and and you know um he's always also shown that he's more than happy to throw his national security people under the bus if it's politically expedient to him so i think this is something that he could roll back on sure mark does it then given the political sort of environment which simon was explaining there does it become more a lot more commercially viable for companies to invest now in competing with huawei 5g technology that we're seeing the uk possibly others might ban huawei 5g does that help companies to think about investing more in competing or do some of the the political calculations about whether it's elections or other things on the horizon really limit that so i think that there's a few points to consider here so one um it is very early days uh in the 5g network deployments so there's still a lot of base stations are going to be uh that are up for grabs there's a lot of money upper grabs uh we've really lived in a huawei nokia erickson world for many years i do think that there is room for more players regardless um so and and i think another issue you know clearly there are geopolitical forces at play but huawei is very keen to point out that it buys 19 billion dollars worth of u.s components every year from companies like qualcomm and intel and i think that you know should we ever see these restrictions rolled back it might have a lot to do with these companies raising their voice so there's also a commercial aspect in addition to this geo political aspect robert the u.s decision to restrict the sale of some of those advanced u.s components that mark was talking about there the chips to huawei does that create kind of a self-fulfilling prophecy right with more chinese components and less non-chinese components in the huawei 5g network the us can make a stronger argument for the security risk of huawei right uh yeah i think you could probably say that although it's worth considering where all these components are manufactured anyway and i expect for 90 of them even though the company is american and the development is done in america the the manufacturer will be done in china um so uh yeah it could be that equally it might um push huawei into the position of developing this technology itself and if there's something we've seen over the last i don't know 10 or 15 years i first have heard of huawei in 2005 when they were quite a niche telecommunications provider and now they're this massive global behemoth so they're certainly not short of funding and you know innovation capabilities so i'm i'm sure they will step up to the mark i don't know how long it will hold them back for how is huawei fairing then in coming up with an alternative to the us chips i honestly at the moment i i really couldn't say i'm sure they would have seen the writing on the wall though it's not like the um the um uh relations have been entirely rosy over the last couple of years and as i've just said you know the the the huawei has and the chinese focus has been the sort of domination of these markets i'm sure they will be looking to have domestic alternatives i'm sure it would have been on the roadmap anyway to try and move away from um american companies or at least move the american companies manufactured to china so they they will have the the fabrication plans already um so i i don't think and probably a lot of local um and domestic know-how anyway so whilst i appreciate that designing the next generation of these things is a massive enterprise in itself and requires a lot of specialist knowledge i can't really believe they'll be too far behind the curve simon there were reports the us is offering money to other countries like brazil which want to build a 5g technology network as long as they shun hawaii obviously how worried do you think the chinese should be at that sort of policy well i i think you know the chinese you know have massive um massively deep pockets to sort of fund um the the outward expansion of their companies and and um you know i mean there has there have been reports of export financing in previous decades which is one of the things that allowed um allowed chinese companies to get market share although um although western western vendors also benefited from from those sort of arrangements from their home government home governments but i think you know if you're if you're asking who who can outpic out compete um the the chinese treasury can the us do it i i guess i mean the u.s can print um can print money right but uh you know that sort of thing is very damaging ultimately because it really distorts markets and and it distorts uh incentives and and these sort of things i mean in in latin america huawei proved quite successful at um at gaining market share and what a lot of people forget is that att has a network in mexico and it's 70 percent uh huawei equipment right and nobody's ever raised any security concerns about that even though it's just across the border so so i think um you know this this some claim that uh huawei represents a cyber security threat it does kind of misrepresent the threat um to a very great degree and the reality is that there are several um states that that have really formidable capabilities in terms of hacking and and and breaching networks and china just happens to be one of those countries um and um simon i'm sure those capabilities are really networking is that the you know huawei has uh these much closer links to the government uh even to the communist party is a sort of comeback claim to that than others really i mean not not really if you look at how how closely um the big american corporates are are tied to the u.s government that goes for companies like boeing lockheed honeywell but also at t and verizon um this is a highly regulated sector and and and so you know you can you can have a you can have a philosophical discussion about who you know whose companies are closer to uh to their governments really i want to bring mark in what do you make of this is this the uk decision something of a point where the tide is turning do you expect others to follow other countries to to ban huawei from their 5g networks right so i do think that you know that there's a few points that that need to be made here i i think when we talk about security risk we need to be very clear about cyber security risk or supply chain risk and in you know my opinion the decision in the uk was largely driven by the concerns that huawei would not be able to fulfill its contractual requirements because it couldn't get components from the us and taiwan et cetera that's very different from an espionage cyber security kind of problem so i want to be very clear about that um so i think that you know with that in mind i think that we um there's a few countries that you want to watch i mean uh in germany huawei's done extremely well with t-mobile uh i would watch that very closely as a bellwether to how some of these european countries that are on the fence are going to go i think india because of political tensions between those two countries might be another area of to watch um and then again we have aggressive lobbying in countries like brazil but i still think that huawei's going to continue to be a major global player in china in southeast asia in africa in many of these emerging markets as you know we've already discussed in mexico you know huawei's cost competitiveness really has enabled mobile broadband to proliferate much faster than it would have without huawei i think that's a very important point let me take that point in 40 seconds robert does mark have a point then huawei's going to be around for a while even the the uk band doesn't ban 5g upgrades or huawei in in 2 3 or 4g networks right i know it doesn't and there is a lot of huawei kit on the 2g and 4g networks and indeed on the fixed line and just to go back to some of that risk i think some of the some of the cyber security risk was legitimate but perhaps has become less so um over the years with with the different architectures but no i i definitely don't think they're going away any time soon and they'll be around on the uk network well past 2027 i'm sure so you've got to wonder how serious all of this is thanks so much gentlemen for coming in and joining us in that discussion it's been a great show let's thank simon lacy robert pritchard and mark einstein and thank you two for watching you can see the show again anytime by visiting our website aljazeera.com and for further discussion head over to our facebook page that's facebook.com forward slash aj inside story you can also join the conversation on twitter our handle there is at aj inside story from me sami zaydan and the whole team here for now it's goodbye you

Channel: Al Jazeera English

Views: 140,870

Rating: 4.5853271 out of 5

Keywords: politics, al jazeera, china news, japan, asia, aljazeera, asia news, aljazeera english, al jazeera english, japan news, huawei, 5g, aljazeera news, china, uk, asian news, aljazeera live, uk news

Id: dmYSRwQM-2I

Length: 24min 55sec (1495 seconds)

Published: Tue Jul 21 2020