China 5G ambitions might hit a Brussels speed bump

The boresome bureaucrats of Brussels have finally gotten back from lunch and there might just be a 5G ban for Chinese companies on the menu before too long.

According to Reuters, the EU officials are considering drawing up new rules which would effectively ban any participation from Chinese companies in the up-coming 5G bonanza. Although there have certainly been some dissenting voices across the bloc over the last couple of months, a bloc-wide ban would be scaling up the anti-China rhetoric more than a few incremental steps.

Officials would almost certainly state any changes would be made for the greater good and are not targeted at a single nation, but that statement is increasingly difficult to swallow. There are a couple of different strategies to achieve the anti-China goal, but the Brussels brunch brigade will certainly have to get a move on if they are to make an impact.

5G is just around the corner and the groundwork is being laid for the lean, mean networks. Purchases will be made in the near future, but with this air of uncertainty flowing out of the Brussels waffle shops, some telcos might be hesitant to charge forward. What’s the point in potential purchasing and deploying equipment if the rosy-cheeks regulators are going to make you tear it out of the network?

The European Commission wants Europe to lead in the digital economy, but for this to happen the connectivity infrastructure needs to be up to scratch. The telcos need consistency and certainty when it comes to policies if they are to spend billions. The Flemish food fanatics are hardly known for their agility but for the European digital economy to remain on-track any significant changes to the regulatory landscape will have to be set in stone sharpish.

Now you start to get a feel for the problem. Who knows what conditions will be put into place with new policies, especially if the public service ponderers want the wording to appear generic enough so China cannot accuse the bloc of targeting it specifically. The gluttonous government officials will have to skip a few free lunches and get a move on.

But how could the covetous civil servants ban Huawei sorry China sorry nefarious bodies from contaminating the 5G goldmine?

The first suggestion is rumoured to be an amendment to a 2016 cybersecurity law to heighten the security requirements for any company which wants to contribute to critical infrastructure. Germany is reportedly making similar amendments to heighten requirements, but to protect itself and also allow Chinese companies to participate. You can only assume any altercations at a European level would not be as welcoming, targeting companies who could potentially be influenced (irrelevant of any concrete evidence) by a nefarious government.

A second suggestion would be more related to procurement processes, though the gaggle of red-tapers will have to be careful here. Whenever regulators and legislators attempt to influence commercial processes too much there is often resistance from the private sector.

The revelation will certainly be of interest to the US, which has done its best to turn the world against the country which is challenging the Land of the Free for global supremacy. While government intervention might sound like a bit of a contradiction for a country which so proudly promotes the concepts of market freedoms and capitalism, we have stopped keeping check on how mental the US is becoming.

But perhaps this was the long-game from the US all along. It bans Chinese companies sharpish and then moves onto plant the seeds of doubt elsewhere knowing other countries would take a more considered and evidence-based approach to such a massive decision. With the Europeans dithering, the US can race ahead with 5G deployment, attract the most innovative companies to establish R&D sites within its own border and all of a sudden it dominates the 5G economy just like it dominates 4G now.

Whatever the outcome, uncertainty is the enemy of progress. If they ban Chinese companies or if they don’t, the bureaucrats need to decide quickly. Regulations need to be set in stone to allow the telcos to consider all the implications and make commercial decisions. Uncertainty is only going to stutter rollouts and damage the influence of Europe on the digital economy.

And for Huawei, 2019 seems to be going from bad to worse.

Huawei faces 5G ban in Australia over security concerns

Having already been shut out from the country’s National Broadband Network, as well as getting the cold shoulder from tier one operators, the prospect of being locked out of the 5G euphoria in Australia is getting real for Huawei.

With the anti-China sentiment overflowing from the US, other countries are now starting to catch the bug, though there should be little surprise Huawei is facing challenges in the Australian market, having done so since 2012. John Lord, Chairman of Huawei’s Australian business, has now warned about the detrimental effect to local businesses and competition in the market, though whether the company has done enough to turn around the negative feeling is looking suspect.

According to the FT, Lord has rejected claims it is a puppet for the Chinese government, and highlighted the importance of the company for 4G and delivering mobile broadband across the country.

“It would have huge significance for Huawei in Australia because at the moment most of our business is 4G and we are providing over 55% of Australia’s 4G requirement across the whole nation,” said Lord.

Anti-China sentiment, in particular Huawei, is not new in Australia as the firm has faced an uphill battle for years. Back in 2012, Huawei was told “not to bother tendering” for a stake in the rollout of the National Broadband Network by Tony Sheehan, Deputy Secretary of the Attorney-General’s Department, over security concerns. The firm had offered concessions, one of which would be Huawei would only hire Australian citizens, though this made little difference.

Despite being almost entirely owned by Huawei employees, the firm has not been able to shake-off assumed ties to the Chinese government, owing to the fact it’s its Founder, Ren Zhengfei, was once an officer in the People’s Liberation Army. Reports have regularly emerged over the years tying Huawei to nefarious ambitions from the Chinese government, however these concerns have certainly intensified since President Trump assumed office in 2017.

Labor Party MP Michael Danly is the man leading the campaign against not only Huawei, but also ZTE this time around. Speaking to the Australian Parliament, Danly said Prime Minister Malcolm Turnbull should take the same approach as in 2012:

“Now he [Turnbull] and his government must resist the blandishments of commercial interests backed by apparently incompetent advice from bureaucrats who don’t understand the implications of the sale of the 5G network to state-owned enterprises or China-based companies who are effectively controlled by Beijing, and I’m talking about Huawei and ZTE.

“Whatever instructions might be issued for Australian sovereignty by Australia after the fact, it will be compromised if we sell the construction of our new central communications 5G network to companies effectively controlled by an authoritarian government whose leader has recently been made dictator for life.”

The US might be stealing the headlines with its anti-China mission, but there are certainly others who are showing the same prejudice. Perhaps this is simply a game of political ping-pong with nations becoming frustrated with the rigid approach to international relations and trade from the Chinese, and once concessions are made the aggression towards Huawei will ease off. But then again maybe is won’t and the world’s leading telecoms vendor will struggle to replicate the 4G success in the 5G world.