- Thierry Spanjaard
5G to set a new center of gravity for the world
We all know there is a first-mover advantage to companies which participate proactively in standardization. Most of the time, they are able to push into standards technologies they already master and market their latest products and developments once they are part of the standard.
One may remember GSM, which became later known as 2G, was standardized by ETSI, the European Telecom Standards Institute. The development of GSM was essentially based on traditional landline expertise and on first developments made by European companies. When 3G was under consideration, the 3GPP was formed to standardize it. Worldwide organizations took part in the 3G project, although the project was still Europe-centric. In terms of market adoption, GSM and then 3G won on the field and gained global adoption at the expense of other standards. Then, the industry started to talk about 4G, based on the principle of making everything IP (internet protocol) based. As Americans were on #1 Internet, it was natural that 4G standards leaned on the US side.
Now, the whole world is working on 5G standards. The announced objective for 5G is to unify voice data, and IoT in a single standard, or, to be more specific, in a single umbrella name covering several types of implementations. Pilots are to be started in multiple locations by companies having in mind the opportunity to push their own developments. Leading organizations worldwide are currently fighting for leadership in 5G standardization. For instance, 5G pilots or even commercial networks are announced by AT&T, Verizon, Sprint, T-Mobile, in the US; BT Group, Deutsche Telekom, Ericsson, Hutchison Whampoa Europe, Inmarsat, Nokia, Orange, Proximus, KPN, SES, Tele2, Telecom Italia, Telefónica, Telekom Austria, Telenor, Telia and Vodafone in Europe; Samsung, Intel, Qualcomm, Nokia, Huawei, Ericsson; and, in the Middle-East, by Etisalat, STC and Ooredoo, among many others!
A few recent events can be revisited taking into account the huge profit anticipations linked to 5G.
For instance, the battle between the US Administration and ZTE can obviously be related to 5G standardizations projects. In March 2017, ZTE, a major Chinese provider of telecom network equipment and consumer electronics, was fined US$ 1.19 billion (EUR 1.0 billion) by the US Department of Commerce for having exported US technology to Iran and North Korea in spite if US embargo. In April 2018, the US Department of Commerce banned US companies from providing exports to ZTE for seven years, which resulted in a fall in ZTE activities as the company was using Qualcomm processors (for around US$ 500 million – EUR 424 million yearly according to analysts), Android operating systems, etc. On May 9, ZTE published a statement saying they had “suspended all major operations.” Now, on May 13, US president D Trump said he was working with Chinese president Xi Jinping to reverse the ban.
At the same time, after years of negotiations, Sprint and T-Mobile, respectively #3 and #4 US mobile network operators announced their merger to form a new company expected to have 126 million subscribers in the US, while Verizon has 150 million and AT&T 141 million. This restructuring of the US MNO landscape has as a consequence to make all three of them more powerful when it comes to standardizing 5G. Sprint and T-Mobile explicitly claim their merger is expected to “extend US global internet leadership in the 5G era.”
Fighting against various players and reinforcing US companies has been set as a goal for the current US Administration. 5G standards are bound to look quite different from the 2G and 3G ones!