web analytics


(Bloomberg) — Fifth-generation networking hype has been in full force since Qualcomm Inc. declared “5G is here, and it’s time to celebrate” in February of last year. The reality, however, has required patience from consumers due to the time needed to roll out the new networks and the dearth of applications to put speed to compelling use.

Source: We Tested 5G Networks Across Asian Cities. The Verdict: Patchy

The message at last February’s Mobile World Congress, the phone industry’s annual gathering, was that 5G is ready.

The technology was working then. It still is. There is a lot more 5G around the world than last year. Dozens of carriers have launched networks. This includes Vodafone in New Zealand.

5G is not about consumers

Bloomberg’s report makes clear there is a gap between reality and consumer expectations.

To get acceptance of 5G, carriers need to sell the idea to consumers. They promised consumers faster speeds on mobile handsets. Up to a point they delivered, although as Bloomberg points out, delivery is patchy.

The truth is that 5G is not and never was about the consumer experience. It is all about enterprise and industrial applications. Engineers optimised 5G for communications between machines, not person-to-person calling.

A voice call on a 5G phone is no different from a voice call on a 4G network. Video streaming works fine on a 4G connection. There are no obvious mobile consumer applications that must have faster data.

The only 5G consumer user case anyone talks about is mobile games with lower latency.  Gaming is a big and important business. Yet carriers did not invest billions so commuters can shoot aliens faster while sitting on a bus.

The world wasn’t waiting for faster mobile phone data

A lack of must-have consumer apps explains why phone makers didn’t race to get 5G models to market. Yes, people will want to buy phones that can make use of the faster speeds. But they are not going to go out at midnight and queue around the block for the privilege of getting them first.

Wonderful things happen when mobile devices and sensors communicate at fibre-like speeds. No doubt 5G will transform many aspects of life. Everything imaginable will connect and either report back or act on the result of data.

Like an iceberg looming in front of a giant transatlantic steamer, the part of 5G that matters most is out of sight. It will have the biggest impact. The technology was always going to underwhelm consumers. It’s not for them. Let’s stop pretending otherwise. There is a better story to tell.

According to The Times, the UK plans to form an alliance of democratic nations to create a 5G alternative to Huawei.

The Times says the group will include the G7 nations: Canada, France, Germany, Italy, Japan, the UK and the United States as well as Australia, South Korea and India.

No doubt if the plan goes anywhere there will be pressure on New Zealand to join. It is the only Five Eyes intelligence alliance member not in the Times’ list.

Huawei top equipment maker

Huawei is the world’s top telecommunications network equipment maker. It has the most advanced cellular technology and is a leader when it comes to 5G networks.

Thanks to favourable currency conditions Huawei manages to make better 5G technology and, in many cases, sell it for less than rivals.

There are dark mutterings from the US that Huawei climbed to the top of the telecommunications market by stealing intellectual property.

Whether or not this is true, Huawei also enjoys significant tax breaks from the Chinese government and favourable trading conditions in the world’s second largest economy. Unlike western governments China is not frightened to intervene in key markets. The nation has long had an industrial policy to become a world leader in telecommunications technology.

Spying accusations

The headline reason Huawei has western democracies clinging together are reports the company either already does, or could soon start, giving Chinese intelligence agencies access to data carried on networks.

While there is no smoking gun proof this has happened yet, the potential for it to happen is real enough. And that’s before you consider the rising tensions between China and the US.

Behind the headline reason is a second, more nuanced argument. Huawei dominates telecommunications hardware.

Huawei’s main competitors still in the market are Nokia and Ericsson. Both are a fair distance behind Huawei. They can’t compete with Huawei’s rapid development cycles, they struggle to match Huawei’s price advantage.

Monopoly

Before the spying accusations became public the gap between Huawei and the also-runs was widening. There was a danger Huawei would move from dominance to something more like a near-monopoly.

Think of how Google dominates web search. Strictly speaking search is not a monopoly, but only one company matters.

Believe it or not, the world could manage without web search. It can’t manage without telecommunications networks. And much of the world would certainly be in trouble if the only supplier of that network technology was based in an increasingly aggressive, potentially hostile country.

Crippling

So crippling Huawei before it reaches that position stops it from becoming a serious threat. Well, that’s the theory and the thinking behind the UK’s alliance plan.

There’s another angle to this. Huawei aside, Chinese companies dominate the supply chains for telecommunications hardware. Both Nokia and Ericsson have operations in China. Many of the chips and components they use come from Chinese factories.

During the early stages of the Covid–19 pandemic we saw the chaos that comes when supply chains shut down. The Chinese government could shut them down whenever it chooses. Sure that would come at a huge cost, but the risk cannot be ruled out.

Tensions between China and the West, especially the US, are higher than they have been for decades. Things have reached the point where even suggesting the formation of an anti-Huawei technology alliance will be seen as ratcheting up the tensions.

Precious little optimism

The UK plan may come to nothing. It’s possible tensions will reduce. But optimism in this area is in short supply right now.

Nokia and Ericsson are the most likely winners if the UK plan gets anywhere. Samsung and NEC also have 5G network equipment, but the two are even further behind and can’t offer a comprehensive suite of products.

Assuming it is Nokia or Ericsson or both the winners will get guaranteed markets and, presumably, buckets of government money. The move won’t be good for innovation and will reduce choice for mobile carriers.

On the other hand, it will bring much needed certainty to the sector. Everyone will be able to get back to building networks and stop worrying about the politics of what should be engineering or commercial decisions.

A group of Rakon shareholders are getting impatient with its undervaluation and want directors to put the company on the block.

In Tech company shareholders frustrated at low value RNZ reports:

A group representing 14 percent has written to the board asking it to immediately market the company to international investors through a tender, amid reports that some Australian investment funds have been showing interest.

“[We] believe the company is significantly undervalued and the company is failing to highlight this value to outside investors,” the letter said.

The story doesn’t carry a byline.

Rakon’s disgruntled shareholders want the company sold to international investors as a way of unlocking their investment. They make it clear they don’t think they will get a big payout from what should be a boom as the 5G mobile telephony market gathers momentum.

Waiting for 5G acceleration

RNZ goes on to quote Rakon chief executive and managing director Brent Robinson. He says:

“As 5G accelerates, so will Rakon and its financial position will be more attractive.

“Be patient, it’s early days for 5G and I believe Rakon’s performance should improve a lot, as far as profits are concerned over the next few years.”

Rakon is a 50 year old New Zealand technology company. It makes frequency control components including quartz crystals. Telecommunication accounts for over half the company’s revenue.

On paper, Rakon is well placed to profit from the worldwide 5G roll out. It appears to be the kind of company New Zealand’s economy needs.

Mobile carriers are spending billions building 5G networks and will continue spending vast sums for the best part of a decade as they build out 5G further and further. Rakon sells its components to 5G equipment makers like Huawei and Nokia. It should be a bonanza.

Not fast enough

The problem is that despite the huge investments in 5G, the roll-outs are not proceeding at the predicted speed. Asia is moving fast. Vodafone has already built a network here, Spark is about to follow. Other countries are not moving as quickly.

It doesn’t help that Rakon’s customers are caught up in a trade war, possibly an espionage row, between the US and China. It is possible that Rakon can supply one team, but not the other. That would hurt its market.

Rakon’s share price has languished to the point where it is a possible takeover target. The shareholder letter suggests at least some of Rakon’s owners want out.

 

RNZ reports two more cell towers were attacked early today:

Police are investigating after two fires in Ōtāhuhu and Favona in the early hours of this morning.

Towers were also damaged in Māngere earlier this week and another in Papatoetoe late last month.

Elsewhere an RCG 4G cell tower was attacked in Northland.

It’s no longer the case of a one-off attack. Clearly something serious is going on.

Critical infrastructure

If New Zealand was at war, an attack on critical infrastructure would be regarded as treason. If a hostile foreign power was responsible for sabotaging critical infrastructure, it might not be an act of war in itself, but it would be a serious diplomatic incident.

In a sense, this is what is now going on with the so called anti–5G protesters. People around the world are being wound up, fed a careful diet of lies and misinformation in order to trigger this kind of behaviour.

There’s no question some of this propaganda is, at some point, serving or even directly controlled by state controlled organisations. It is quite deliberate. You can speculate which states might be behind the messages.

Target

New Zealand may not be in their direct sights. It’s unlikely anyone sitting in a foreign capital is high-fiving a colleague because a cell tower was taken out in Ōtāhuhu. We are probably collateral damage in a slow-motion underground cold war being fought elsewhere.

That doesn’t absolve the people who start and feed these rumours and misinformation campaigns. It does go part way to explaining it.

There’s little likelihood any information campaign organised by New Zealand’s government or telcos can counter this propaganda. For a start, the people who believe these conspiracy theories would be unwilling to take, say, Vodafone’s word on anything to do with 5G.

Moreover, any information campaign would naturally be spread by mainstream conventional media. Conspiracy theorists are allergic to mainstream media.

That’s if they see it at all. They are far more likely to believe the rants of red faced presenters promoting dubious health products on You Tube, other social media on underground channels.

It doesn’t help that high profile commentators work so hard to undermine reasonable government actions and messages in other areas.

This goes some way to encouraging a climate where an attack on critical infrastructure might feel more like fighting for freedom than destroying essential infrastructure that helps everyone.

No easy answers

As a first step, it’s probably a good idea to install low cost cameras at cell sites to monitor suspicious activity.

This is hardly another step on the road to tyranny… using security to protect private property is reasonable and well established.

Where things get more dangerous and contentious is dealing directly with misinformation. Incitement to commit a crime is a criminal offence.

Sure, there is often a thin line between incitement and legitimate free speech. But anyone who is, say, sharing information on how to attack a cell tower or broadcast an attack is clearly committing a crime.

Beyond that I don’t have anything to contribute. There are no easy answers. As I said in an earlier post about cell tower attacks, it’s not as if we don’t have other, bigger problems to deal with at the moment.

IDC vice-president Hugh Ujhazy says 5G is going to be huge for the mobile carriers 

 He says: “We’ve done a telco capex [capital expenditure] forecast for the Asia-Pacific region excluding China and Japan. The fastest growing single capex item is the build out of 5G radio access networks. It’s going to grow at 93 percent compound annual growth rate [CAGR]  over the next five years. That’s in a context of a decline of about 1.6 percent CAGR decline in in their total capex. So, it’s obviously going to be big for operators.” 

For Ujhazy, 5G remains mainly an enterprise play, but there is also a consumer play in the mix. He says carriers need 5G technology because it simplifies and streamlines their job of provisioning and managing a cellular customer. They also need it so they can keep offering the increase in performance and capacity that we’ve all come to expect. 

Ujhazy has changed his view of network slicing in the last year. “I didn’t believe in the private networks that are possible with 5G. Vodafone Global changed my mind. They said they have about 160 different requirements – that’s expressions of customer interest – already on the table. So there will be a place for it. I’m not sure how that will make sense over time. But it is coming.” 

No overnight change

Another aspect of 5G is that it won’t be an overnight revolution. He says: “It is going to be with us for the next 20 years. There’s no need to run up to the buffet to grab a quick bite, it will be here for a while.  

“Everything about the landscape for 5G is a co-existence strategy with 4G. And that 4G network isn’t going anywhere probably for the next two decades. When we look at things like broad widescale coverage over long distances, a lot of that is best left to 4G.”  

 The big change will come with stand-alone 5G. Once the millimetre spectrum is available, that will be where customers get to see the promised high speeds. He says: “It is only going to be there in pockets where it is needed. You’ll see a blended environment in terms of the Gs for some time.”  

This mixed environment goes for all the Gs: 3, 4 and 5G. Ujhazy says each of them does something interesting. “The 3G is used today for M2M [machine to machine], for cellular connected devices that will probably move to narrowband. Some markets are retiring their 3G, but the message here is all about the overall portfolio of connectivity options you now have as a user. 

“It’s the same for enterprise customers and consumers. You have everything from fibre to Wi-Fi 6 to 4G and 5G. We’ve got more choices than ever before and building the right strategy for that is the challenge we face.”  

Sydney-based Hugh Ujhazy is vice president, IoT and telecommunications for IDC. He leads the research company’s analysis of fixed and mobile network services for the Asia-Pacific region. This story was originally published in The Download, the Chorus stakeholder magazine