The 5G Dilemma: Mapping Responses Across the World Aarshi Tirkey The 5G Dilemma: Mapping Responses Across the World Aarshi Tirkey © 2020 Observer Research Foundation All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from ORF. Attribution: Aarshi Tirkey, The 5G Dilemma: Mapping Responses Across the World, Observer Research Foundation, May 2020. Observer Research Foundation 20 Rouse Avenue, Institutional Area New Delhi, India 110002 [email protected] www.orfonline.org ORF provides non-partisan, independent analyses on matters of security, strategy, economy, development, energy and global governance to diverse decision-makers including governments, business communities, academia and civil society. ORF’s mandate is to conduct in-depth research, provide inclusive platforms, and invest in tomorrow’s thought leaders today. Design and Layout: simijaisondesigns Cover image: Getty Images/Traitov and NASA ISBN: 978-93-89622-95-9 ISBN Digital: 978-93-89622-96-6 CONTENTS PREFACE .................................................................................................................................................................. 2 ABSTRACT .................................................................................................................................................................. 4 INTRODUCTION ............................................................................................................................................................ 5 CHAPTER 1. HUAWEI: THE COMPANY AND CRITICISMS ............................................................................ 9 CHAPTER 2. RESPONSES: FOUR CASES ............................................................................................................ 16 CHAPTER 3. KEY CONCERNS IN MAJOR GEOGRAPHICAL REGIONS ................................................... 36 CHAPTER 4. THE SITUATION IN OTHER REGIONS ........................................................................................ 69 CONCLUSION ................................................................................................................................................................. 88 ABOUT THE AUTHOR ................................................................................................................................................. 90 PREFacE The roll-out of the 5G network, the next generation of global communications, has not only emerged as a critical flashpoint in the emerging geopolitical contestation between China and western countries, led by the United States (US), but it has also engendered an interesting debate in India about its own choices. When it comes to adopting and deploying 5G networks, policymakers across the world are facing a critical choice—one that will require them to carefully weigh and balance a broad range of economic, political, technical, and strategic considerations. Technology – particularly information and communications technology – has long played an important role in shaping geopolitical contours. In the late 19th century, the United Kingdom (UK) was the first mover of telegraphy and submarine cable systems. By building these extensive communications network, the UK was able to maintain channels of communication with its colonies and consolidate the British Empire. The subsequent development of radar technology by the UK gave it an edge over the German challenge during World War II. Following the war, British hegemony was directly challenged by the US as it made rapid advancements in telephony, becoming one of the first in the world to deploy a satellite communications system. Eventually, the US and its allies used America’s extensive satellite networks to intercept and decode information during the Cold War period. The US’ use of satellite technology to spy on the flow of information and communication through its satellites has also led to concerns which echo some of the themes of the current debate surrounding the 5G network of Chinese company, Huawei. What makes this debate particularly challenging is the growing distrust around the world over China’s rise because of its opaque decision-making system and its growing use of information asymmetry for geopolitical leverage. While China stands to gain significantly by being the first mover of this technology, the US has continued to put pressure on its allies and partners against accepting Huawei’s telecommunications equipment. There are growing concerns about China in the wider West which are likely to lead western nations into giving renewed impetus towards developing alternative 5G networks. This in turn can lead to the development of two politically and geographically divided 5G networks which may not be interoperable, thereby leading to lower economies of scale and higher transaction costs. This important study by Aarshi Tirkey, Junior Fellow at Observer Research Foundation (ORF), is aimed at informing the wider policy debate in India on this important issue by explicating the responses of various nations across the world on the issue of 5G. It starts by comparing Huawei’s position vis-à-vis other major telecommunications equipment manufacturers across several verticals before moving on in the second part to delineate the responses of the US, UK, Australia and Canada. The third part of the monograph explores the responses of nations from Europe and the Indo-Pacific, while the final section broadly examines the Middle East, Latin America, Russia and Central Asia. 2 | The 5G Dilemma: Mapping Responses Across the World I would like to thank Aarshi for taking on this ambitious project, and Vinia Datinguinoo Mukherjee for taking this volume through to publication. If New Delhi is to make the best possible decision on this highly complex matter, then it needs to carefully study global responses to the challenge. While the ongoing Covid-19 pandemic might delay the 5G rollout in India for some time, there is no wishing away this question. The Strategic Studies Programme at ORF brings you this monograph to push an already animated debate on 5G in India towards a more serious policy conversation so that India and its policymakers can make prudent decisions at a time of enormous global flux. Prof. Harsh V Pant Director, Studies and Head, Strategic Studies Programme Observer Research Foundation, New Delhi May 2020 The 5G Dilemma: Mapping Responses Across the World | 3 Abstract The 5G network, the next generation of wireless technology, is a subject in ongoing tensions between the United States (US) and China. Washington has raised concerns that sourcing 5G equipment from Huawei and other Chinese companies will expose a country to national security risks, such as espionage and surveillance. For its part, Beijing has dismissed these concerns as a flagrant attempt to politicise a technological issue. Their confrontation, however, has transcended to a global level—both the US and China have been engaging in diplomatic lobbying to influence the decision of countries on the sourcing of their 5G equipment. As countries in many parts of the world proceed to upgrade their networks, they are faced with decisions that will not only be based on technological or economic considerations, but will have immense strategic implications as well. This monograph provides an overview of the responses of countries to the 5G dilemma and the factors that have influenced them. 4 | The 5G Dilemma: Mapping Responses Across the World Introduction The 5G network, the next generation of wireless technology, has emerged as one of the biggest turning points in geopolitical tensions in recent times. 5G’s unique features and applications mean that the technology will be critical for economic and technological advancement. At the same time, the country that controls and spearheads development of said technology will also gain the enviable position of becoming a technological leader. As power rivalry between the United States (US) and China intensifies, it is highly likely that the new networks will shape the competition for 21st-century dominance between two leading technology superpowers.1 5G is the fifth generation of cellular technology. In contrast with 2G, 3G and 4G networks, 5G will provide fibre-like connectivity over wireless networks through greater speed, higher capacity communication and ultra-low latency. These features will help unlock revolutionary use cases to support the demands of individuals, businesses and governments alike. From reducing movie download time to a few seconds, to supporting industrial automation for manufacturers and to operationalising government initiatives such as smart cities, 5G is viewed as an enabler for social and economic development. The network will also power emerging technologies commonly associated with the Fourth Industrial Revolution (4IR) such as artificial intelligence, robotics, autonomous vehicles, 3D printing, nanotechnology and quantum computing, which can bring long-term gains in efficiency, productivity and quality of life.2 An illustration to further demonstrate 5G’s potential is its ability to support machine- to-machine communication and enhance Internet of things (IoT)3 applications utility in aquaculture and fisheries. In Indonesia, Telkomsel—a leading mobile operator— and eFishery (a Bandung-based start-up) have jointly developed a technology that enables a fish farmer to remotely control a fish feeder unit via a smartphone, instead of doing it manually—a