Exclusive: UK backing search for alternative to Huawei

Exclusive: UK backing search for 5G and 6G alternative to Huawei

08 June 2020 | Alan Burkitt-Gray

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Officials in the UK are exploring ways to rebuild the country’s capability in making telecoms equipment, so local companies can win a share of the current 5G investment programme if Huawei is blocked.

They also have their eye on the 5G+ transition technology that will follow 5G in a few years, and what they expect will be a £1 trillion global market for 6G mobile in around a decade.

So far, according to Capacity’s sources, the moves are centred on UK agencies and have not yet reached ministerial eyes. But one official told Capacity: “This would have to be a multinational project.”

The work has started because officials and others are aware that the UK has lost almost all its production capacity and skills in fixed and mobile telecoms. Research labs and production sites across the country have closed with the disappearance of UK-owned and foreign-owned companies such as Marconi, Nortel and Plessey.

The UK is seeing moves as particularly urgent, following Microsoft’s acquisition in May of Metaswitch Networks, 40-year-old company that specialises in network functions virtualisation (NFV).

Now the market – in the UK and elsewhere – is dominated by two Scandinavian companies, Ericsson and Nokia, and one Chinese company, Huawei. South Korea’s Samsung, Japan’s NEC and China’s ZTE have smaller market shares.

In the UK, the House of Commons Science and Technology Committee, formed of back-bench politicians, is looking at the country’s domestic capability in telecoms manufacturing.

The committee’s enquiry goes right back to some of the fundamentals, starting with: “What led to the current lack of market competition among telecommunications equipment suppliers and the absence of a domestic supplier in the UK?”

The UK’s concerns are reflected by the US National Telecommunications and Information Administration (NTIA), which is running a study on the steps to be taken to achieve secure 5G. The NTIA requires comments by 18 June.

In both countries officials are concerned about national resilience, especially as Huawei and ZTE are banned from supplying US operators and the UK is taking steps to limit Huawei’s market share.

“Officials are trying to get people from the industry to form a working group. There are vestiges of the telecoms manufacturing industry in the UK,” one source told Capacity.

They are looking at a 20% share of the £75 billion infrastructure market for building 5G in the UK. “But we could have a competent capability for 5G+,” the source said, referring to an upgrade of 5G in around five years. “And we could have a globally competent 6G business.

One of the questions that is troubling UK politicians is that most of the skills are in the so-called M4 corridor, the stretch of towns running westwards from London along the M4 motorway to south Wales, including places such as Maidenhead, Swindon, Bristol and Newport.

But the politicians are seeking ways to focus on areas of former heavy industry, including Newcastle upon Tyne in north-east England and the central belt of Scotland between Glasgow and Edinburgh.

“No one is trying to set up a new company,” a source told Capacity. Rather, attention is focused on bringing existing companies together informally to focus on future telecoms markets. “We’re working with existing equipment makers.”

Another prominent technology specialist told Capacity: “They want a bunch of people who are not Chinese.” This could extend internationally, said this person. “I’m reading between the lines. It is being developed as a policy and they [UK officials] want to see if other people do as well.”

One senior executive of a non-UK operator ridiculed knowledge of telecoms technology across governments in general: “These are the same idiots who didn’t save Nortel or Lucent. But we do think that there are lots of bits and pieces in 5G that can be put together.”

Another close observer added: “The idea of creating a UK 5G vendor from the ground up, with all the R&D, doesn’t make sense. But you could encourage companies to come to the UK.

Another person, close to the relationship between the UK government and the mobile industry, said: “Scale is vital,” because that would give a UK vendor or alliance of vendors a role in setting 6G standards. Operators need to have a choice of vendors and need to have more choice.”

This person added: “The UK science and technology committee and the NTIA in the US show that governments are getting to a level of detail not done before.”