“Slow and steady will not win the race”
How Europe has become a bystander in the race for 5G
11 October, 2021
You’ve heard it before. Technology has made us develop such a strong acquaintance with all matters of convenience, that patience is truly a virtue in the 21st century. But contrary to popular notions, pre-school children in the 21st century seem to perform better than their counterparts from yesteryears in the infamous “delay-of-gratification test”, more popularly known as the Marshmallow Experiment. The outcome of the study has surprised certain people (definitely me). However, while we may have truly gotten better at being patient, it is only until the toddler is exposed to the internet. Then it’s a whole new story.
Internet rage has become a well-documented and studied phenomenon of the 21st century. Claudia Hammond in her book Time Warped opines that as Einstein tells us that there is no such thing as absolute time, the brain lacks an absolute mechanism for measuring time in the brain. This is why things that are perceived slow compared to our expectations can tend to cause higher frustrations than when we expect things to be slow. And with the lightning-fast internet speeds we have these days, the only thing worse than no internet is slow internet. And this problem is going to intensify within the geographical confines of the European Union with the advent of the next wave of internet technology, namely, 5G.
The current state of 5G showcases that the technology has arrived, but is still limited in its accessibility. Large parts of Europe are still grappling towards adopting the technology and those who have adopted it are still utilizing 4G frequency bands for data transmission with 5G equipment. Whilst this would lead to a slight increase in speed, this does not allow for the other advantage of 5G over 4G, bandwidth.
For those unaware of the technical nuances, 4G and 5G technologies operate on different spectrums of frequencies. Spectrum refers to the invisible radio frequencies that wireless signals travel over. These are the signals that enable us to make calls through mobile, use the internet, etc. The frequencies we use for wireless communication are only a portion of what is called the electromagnetic spectrum. Other parts of the spectrum carry broadcast radio (FM/AM radio) television signals. Portions of the spectrum are grouped in bands, depending on their wavelengths. The entirety of the electromagnetic spectrum is from 3 Hertz (Hz) which would be extremely low frequencies, to 300 EHz (gamma radiations). The spectrum that we use for communication is between 20KHz and 300 GHz. And finally, within our communication networks, we have 3 kinds of spectrum:
- Low-band spectrum – Under 3 GHz – Low-frequency radio waves can travel longer distances without being interrupted. But sadly, they only carry a minimal amount of information. Most of the 2G and 3G networks work on this, therefore they provide wide coverage but slow speeds.
- Mid-band spectrum – Between 3-24 GHz – is a combination of low and high band spectrum. Hence provide a good mix of capacity to carry information, and coverage area. 5G communication is expected to find itself in these spectrum ranges.
- High-band spectrum – Above 24 GHz – signals travel way shorter distances from the point of transmission. Requires multiple repeaters every few 100 meters, but provides immense capacity for informational load and high speeds.
Finland and Denmark, two European countries with some of the fastest 5G speeds, still function very much within 4G frequency bands. The Danish Energy Agency (DAE) through a process of auctions, allocates to various service providers the authority to operate within certain frequency bands. The DAE has allocated only 700, 900 MHz, and 1.5, 2.1, 2.3, and 3.5 GHz for auction recently, so all currently existing 5G communication is still very much within the frequencies of the old spectrum. While this might be enough for the current circumstances where people are merely using social media through 5G networks, when it comes to conveniences such as driverless cars, smart cities, Internet of Things, and other buzzwords that make tomorrow seem like the utopia today could never be, we need 5G. High transmission bandwidths and low latencies become essential when crucial information needs to be transmitted in enormous amounts. Low-frequency networks are currently highly congested with a large number of users. There is much less congestion the more available frequencies are higher up the spectrum, and 5G is expected to be broadcast on these channels. Therefore, the aforementioned conveniences will be rendered rudderless without adopting high-frequency 5G networks, and current European 5G providers will very soon be identified as underage patrons of an elite Victorian-era gentleman’s club.
Europe is clearly trailing in the race to adopt 5G technologies. Adoption rates for 5G are already high in the United States and large parts of Asia. As of 2020, only 1.3% of all mobile internet traffic in Europe comes from 5G networks. Data on network access shows an improvement for the EU, but it still pales in comparison to the US and South Korea, the leader of 5G adoption in Asia.
The 5G race that is currently playing out in the world is led by 2 countries, the United States, and China. Both countries have their own competencies that are mutually exclusive of one another. The US is the leader in designing software that can run 5G technology. Most Silicon Valley companies collaborate with the White House so that verifiable and replicable standards for 5G equipment are created. Chinese standards for telecommunication equipment and telecom operations do not uphold laws on data protection to the level that is upheld in its western counterparts. This creates cause for safety and privacy concerns for access and possible misuse of user data. Hence by creating global standards for 5G equipment and networks it would be an indirect means of blocking Chinese software from entering larger markets as they would not comply with the universal standards. Furthermore, US tech giants such as AT&T, Microsoft, and Dell have begun to invest heavily in software and cloud capabilities to strengthen their 5G networks. Michael Dell has made it his mission to ensure that “Software is eating the hardware in 5G” and keep the country ahead in its software prowess in the next generation of internet communications.
But software is only half the battle. Who provides the infrastructure, one may ask. And the answer is that there is no established large-scale equipment manufacturer that is American and produces 5G infrastructure. For that, we need to look elsewhere, to the east. To China.
Chinese equipment manufacturers dominate the 5G infrastructure market, with Huawei being the leader amongst them. It has a market share of nearly 35% of all Networks service providers from all over the world, as of 2019. If other equipment manufacturers such as ZTE and Motorola are taken into account, it would account for nearly 50% of the market.
So where is Europe you may ask? The unanimous voice of experts agreeing that Europe has fallen behind in the race would rival the best choirs in the world in holding a note. The hardware infrastructure for 5G is being created within Europe by two of the leading providers, namely Ericsson and Nokia. But their market share is lesser than their Chinese competitors. Their combined market share is in fact still less than Huawei’s alone. Huawei’s 5G infrastructure on average is also between 20-30% cheaper than its European competitors. Big telecommunications providers such as Deutsche Telekom believe that such costs play a huge factor in adopting the infrastructure, and a complete ban on Huawei would hurt Europe’s ability to get on board with next-generation technology.
In the pursuit of swift adoption of next-generation internet, another conundrum rises. One that has far-reaching consequences and needs careful consideration. That is the geopolitical aspect involved in the adoption of 5G technology. China furthers its influence around the world with the help of its Belt & Road Initiative, but for those beyond its geographical contiguity exists the Digital Silk Road (DSR). The DSR is beyond a mere infrastructure project. China pursues this goal by enabling the opening of new markets for Chinese tech firms and strengthening the world’s digital connectivity with China. These initiatives aim to enhance China’s domestic tech innovation and gain a foothold in overseas markets. The geopolitical advantages of setting up another nation’s communication infrastructure are enormous.
The United States has taken a clear stance on this issue but Europe on the other hand is still exhibiting mixed responses. By adding the industry-leading 5G equipment manufacturer, Huawei, on its ‘Entity List’ the US Government has effectively blacklisted the Chinese telecommunications equipment maker’s ability to trade in hardware and software services to American companies. The Entity List is specifically created to blacklist organizations or individuals believed to be involved or pose a significant risk towards American national security or foreign policy interests.
The US government sees 5G as a matter of geopolitical security, based on 3 prongs.
- Concerns of Security – The fear that is prevalent in the United States is that Huawei’s infrastructure equipment could facilitate political/industrial espionage.
- Concerns around Economics – American telecommunications manufacturers and their allies in Europe will be faced with increased competition. Chinese equipment manufacturers benefit from their ambiguous labor conditions thereby producing equipment at a lower cost. As mentioned before, Huawei’s equipment is 20 – 30% cheaper than the existing infrastructure.
- Concerns around Strategic importance – Huawei is an organization of strategic importance to China. Hence it receives diplomatic, financial, and political support from the Chinese Communist Party. Therefore it is subject to the influence of the state at a more personal level than other Chinese firms.
The most intriguing reason why the world (and the US) rightly considers Chinese technology firms to be a security threat is because of the National Intelligence Law (NIL). The Chinese Law was passed in 2017 and requires all organizations and citizens to “support, assist, and cooperate with the state for intelligence work”. Experts such as Jerome Cohen from the Council on Foreign relations opine that there is no plausible way that Huawei can resist any order from the Chinese government and continue to exist as an entity within the geographical confines of the country. This is in spite of the fact that Huawei has recognized the situation and therefore agreed to sign “no-spy” agreements with various western countries, including the UK and Germany.
In the EU, China furthers its influence around the world with the help of its Belt & Road Initiative, but for those beyond its geographical contiguity, exists the Digital Silk Road (DSR). The DSR is beyond a mere infrastructure project. China pursues this goal by enabling the opening of new markets for Chinese tech firms and strengthening the world’s digital connectivity with China. These initiatives aim to enhance China’s domestic tech innovation and gain a foothold in overseas markets. The geopolitical advantages of setting up another nation’s communication infrastructure are enormous. The mixed response shown by EU member states is prevalent in matters relating to the adoption of 5G equipment from China. The governments of Spain, Portugal, Luxembourg etc. have not passed laws that exclude Chinese telecom equipment manufacturers. Other countries are using non-legal instruments to achieve the same goals, hence the continent is not providing a clear and unified response to the threat emerging from the east.
In the EU, most countries have ensured that equipment from Huawei will not be used for their 5G infrastructure, and with the passing of Berlin’s IT Security law, the expansion of Huawei in Europe has taken a considerable backseat. Furthermore, without specifically mentioning the nation, representatives from the EU, NATO, and other western allies came together to set up guidelines for future 5G networks in what is known as the Prague Proposals. This includes concerns about utilizing equipment supplied by vendors that might be subject to the influence of government actors. This automatically discards Huawei as a possible vendor for the countries that have adopted the Prague Proposals.
Where does this leave Europe? Engaging in a geopolitical exclusion of China would lead to increased economic costs on the continent, but the EU establishment has doubled down on its stance. The EU realizes that there is always a cost that can be paid for security. Therefore, the obvious conclusion would be to trust the existing European manufacturers of telecommunications equipment, namely Ericcson and Nokia. But, that isn’t happening. Huawei is just really that inexpensive, and considering the pandemic that has allowed Murphy’s law to wreak havoc in the continent, the purse strings of the EU and its member states have only tightened. This has resulted in the member states looking for alternatives, namely an unproven technology, named Open RAN.
Open RAN or Open Radio Access Networks is not a new technology per se, but rather a way of designing existing telecommunication equipment to allow them to be used in an interoperable manner. Instead of using a single-source system to build the radio access portion of a 5G network, a fully developed and standards-based Open RAN system would allow all telecom operators to design standardized equipment. This would allow vendors to mix and match components and arrange them as desired. Hence the final part of the 5G network that could be used to read signals and data, could be procured from a manufacturer of choice and avoid the risk of espionage without incurring the costs that come with security. In a perfect world that would solve the geopolitical issues that arise with 5G. But we live in a world ‘where monkeys steal vials of blood from COVID patients’, so far from ideal.
Experts have argued that Open RAN as a technology is still unproven and setting global standards for a technology that has already been adopted across the world is a fool’s pursuit. Germany has tried its best to step up its efforts in Open RAN investment following the IT security law, by committing € 300 Million of the taxpayer’s money towards investing in these technologies. While it may seem that Schumpeter’s perennial gale is pushing Nokia and Ericsson towards adopting Open RAN, industry experts deem their investments in this new technology as mere lip-service. Nokia and Ericsson are more concerned that the pushback against Huawei hasn’t lead to a direct increase in demand for their equipment within the European continent, but rather has allowed other smaller players and new microchip manufacturers to enter the market. To give the last word to my best friend from high school who now works for a leading telecommunications manufacturer in the United States, “As a policymaker, you simply think of how we can make Open RAN work. But people in manufacturing are still struggling with the question, ‘Will it even work?’”.
To not miss out on the next train to development, Germany has already begun investing in 6G technology by allocating nearly €700 million on investment into 6G research that would be used in a phased manner until 2025. But it may be the case that Europe is already behind the other world leaders in the next technological race. USA, Japan, China, and South Korea have already begun their investments in 6G a year ago and Europe has started slowly in the next race. Geopolitical struggles will only exacerbate as the world becomes smaller and more interconnected due to faster technologies. As European and world nations discovered the need for energy independence due to the acute energy crisis caused in the 1970s, it seems to be the case that technological independence at the level of infrastructure would determine progress in the world of tomorrow. The EU must take cognizance of its position in the race and knowing that it is already behind, work toward strengthening its partnership with the US. Recent events with regard to AUKUS have shown that the US is not necessarily reciprocative of European interests. Consequently, the Trade and Technology Council meeting between the EU and the US was a bit of a damp squib. The member states have rightly decided to begin investing in next generation tech, but a more united approach between all those in the union is the best way forward, than individuals such as Germany and France following their own path.
The 46th President of the United States, Joe Biden, has made it clear that in his opinion the next big war will be fought as a consequence of a cyber-attack. As most world leaders echo his sentiment (evidenced by the increase in ransomware attacks in the past 6 months), one thing has become increasingly evident. It is not just technological sovereignty, but technological prowess that will determine the leaders and the peacemakers of tomorrow. And as it stands, Europe just realized it shouldn’t be taking a nap.