Singapore must stay out of the 5G war between US and China
A NUMBER of countries, including Singapore, are caught in the middle of the trade war between the United States and China.
The global technology supply chain, which passes through Singapore, has been on tenterhooks ever since the US declared a national emergency, which arms the federal government with powers to block American companies from buying foreign-made telecommunications equipment.
The US curbs on Chinese telecommunications giant Huawei is the most visible fallout of this trade war. Huawei is one of two companies in the world (the other being Finnish telecom major Nokia) which makes all products within the telecommunications value chain. In other words, it manufactures both the networking equipment which allows for mobile signal generation as well as the devices (smartphones) that use these networks.
Huawei, which is the most visible symbol of China's technological prowess, aims to become the world's biggest smartphone vendor. It's within striking distance. According to IDC vendor shipment numbers, in the fourth quarter of 2018 Huawei, with 16.1 per cent market share, was the global No 3 behind Apple (18.2 per cent market share) and Samsung (18.7 per cent).
As a direct fallout of the trade war, Huawei is being abandoned by its biggest US partners and this, in the short term, can deliver a crippling blow to its ambitions. Google - whose Android operating system Huawei uses on its phones - has cut ties with the company. Hardware vendors such as Qualcomm and ARM have done likewise. While the setback to Huawei's smartphone business is in the news, it can be argued that this is only a sideshow. The actual battle is for the fifth generation mobile telephony networks (5G) that are being trialled across the world and which are expected to be rolled out from next year onwards in various countries, including Singapore. The US wants its allies to ban Huawei from participating in the trials and also from building the networks.
The US has expressed concern that Huawei has links to the Chinese military and hence there is a possibility of it installing "backdoors" in 5G networks which can be used for espionage. While the Chinese vendor has denied this allegation, the fact remains that in today's digitalised economy a tremendous amount of valuable data will flow through 5G networks and there is some justification for being paranoid about network security.
The interesting point here is that while the US has publicly expressed concern about security, what has been left unsaid is that we have a situation where, for the first time, there is a challenger to Western technology dominance. Till now, the West has set the standards for every piece of technology. For example, in telecommunications, the standards that defined 2G, 3G and subsequently 4G networks were set by Western entities such as GSM (Global System for Mobile communication), which is an European organisation. This is the first time we have a situation where an Asian challenger has stepped up to the high table that will set the standards and technology to drive future telecommunication usage.
For countries like Singapore there's a need to balance out vendor choice so as to ensure there is no lock-in to any single vendor. At the same time, the security threat is real and needs to be tackled. It is the responsibility of the telecommunications operators to ensure that the networks are secure, of the highest quality, and are competitively priced. There is no need to take sides but vigilance is certainly warranted.
