PARIS
\nIt\u2019s a dilemma for European telecoms firms: Should they steal a march on competitors and rapidly roll out next-generation 5G mobile networks using equipment from top supplier Huawei? Or should they heed US-led warnings of security threats and sit tight, and possibly fall behind?
\nGetting it right will have big consequences as 5G networks are the next milestone in the digital revolution, bringing near-instantaneous connectivity, vast data capacity and futuristic technologies.
\nNo operator wants to be left behind, and neither do governments who see 5G technology as a future key driver of economic growth.
\nChina\u2019s Huawei has quietly become a leading supplier of the backbone equipment for mobile networks, particularly in developing markets thanks to cheaper prices.
\nSpearheading cutting-edge 5G equipment has also seen it make inroads into developed markets.
\nHowever, a growing number of Western states are turning their backs on Huawei, fearful that its equipment could be a Trojan horse for Beijing\u2019s intrusive security apparatus as Chinese laws require its firms to cooperate with intelligence services.
\nHuawei strenuously denies its equipment could be used for espionage.
\nWhile most European governments are trying to make up their minds, mobile operators must make their own choice, and it\u2019s a tough one.
\nSeveral operators have already begun tests with Huawei equipment, such as Bouygues Telecom and SFR have in several French cities.
\n\u201cHuawei is today more expensive than its rivals but it is also much better, they have really moved ahead in terms of quality of network equipment over their European competitors,\u201d said an executive of one European mobile operator recently on condition of anonymity.
\nExperts say Huawei is between six months and one year ahead of Sweden\u2019s Ericsson in terms of the quality of its 5G equipment.
\nThe number two mobile network equipment manufacturer, Finland\u2019s Nokia, is said to be even further behind.
\n\u201cMany want to avoid the Chinese but they are currently the most advanced in the area,\u201d said Victor Marcais, a telecoms and media specialist at Roland Berger consultancy.
\n\u201cHuawei has moved in the past few years from being the \u2018low cost\u2019 option to becoming the 5G leader.\u201d
\nSeveral sources said that Huawei even helped Nokia in research and development to avoid facing off alone against Ericsson in 5G.
\nHuawei would only say that it has \u201clong-term partnerships\u201d with several of its competitors in areas such as production methods, standards and patents.
\n\u201cWe have always defended the principle of open innovation and collaboration to facilitate the development of the telecoms industry,\u201d a Huawei spokesman said.
\nAfter establishing itself as a player on 4G networks, the Shenzhen-based group has doubled down to dominate 5G.
\nEach year it invests between 10 and 15 percent of its sales revenue on research and development. It spent $13.8 billion on R&D in 2017 and $15 billion last year.
\nThe strategy is paying dividends.
\nIn 2017, Huawei was by far the number one supplier of equipment for telecom networks, with a 22 percent market share, according to IHS Markit. Nokia trailed with a 13 percent share and Ericsson with 11 percent.
\nThat gap could grow as more operators across the world develop 5G networks, although the current geopolitical tensions pose a risk to Huawei exploiting its technological lead.
\nEuropean nations, like those in Asia and the US, want a rapid rollout of 5G with the first services expected to be running next year. A target that is difficult to attain without recourse to Huawei.
\n\u201cThe regulators and governments have quite ambitious timetables while the operators see 5G as a way to reduce costs per gigabyte as data volumes explode,\u201d said Marcais at Roland Berger.
\n\u201cHowever, we see in Germany, for example, they aren\u2019t happy the way things are shaping up.\u201d
\nDeutsche Telekom, in an internal document obtained by Bloomberg, warned that Europe could fall behind China and the US by as much as two years if it forgoes using Huawei\u2019s 5G equipment.<\/p>\n","protected":false},"excerpt":{"rendered":"
PARIS It\u2019s a dilemma for European telecoms firms: Should they steal a march on competitors and rapidly roll out next-generation 5G mobile networks using equipment from top supplier Huawei? Or should they heed US-led warnings of security threats and sit tight, and possibly fall behind? Getting it right will have big consequences as 5G networks […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-49054","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n