Editor's Note: New CPA member Parallel Wireless CEO Steve Papa talks about his plan to disrupt Huawei with new 5G wireless systems based on a completely new RAN (radio access network).
US lawmakers and tech experts want a strong American competitor
[Audrey Conklin | March 8, 2020 | FoxBusiness]
Huawei is the leader in 5G for a reason: it offers the most affordable end-to-end solutions for national telecom providers, which is what made it so popular in rural U.S. areas and in Europe.
Steve Papa, founder of 5G equipment provider Parallel Wireless, confirmed these factors as what sets Huawei apart from other leaders in 5G equipment but added that other companies are emerging quickly as potential competitors.
"We have American alternatives right now," Papa said. "There are three vendors: Parallel Wireless, Mavenir, and Altiostar."
Competitors are important because the U.S. and other countries are concerned that Huawei poses a national security risk due to its reliance on the Chinese government and its leaders' own ties to the country's Communist Party.
"I'm trying to tell the story that if we don't move faster, we have a big defense problem. I'm trying to say that as an authority on the subject," Papa said. He added, however, that it takes time to catch up, especially in rural markets.
5G is becoming the new global standard for wireless networks, and it is expected to promote major innovation in the tech and energy industries, specifically, because it will give more power to tools like artificial intelligence.
These 5G wireless equipment manufacturers need "more investor and government resources" to compete with Huawei since the tech giant has the backing of the Chinese government behind it; that's a lot for companies like Parallel Wireless to pit itself up against, but Papa says Parallel and others are "nipping at Huawei's heels." They just need more help -- and fast.
Chinese economic policy expert and author of the upcoming book, "How China Works," Godfree Roberts said of the United States' wireless infrastructure similarly pointed out that U.S. spending on telecom equipment companies does not compare to China's.
"We failed to invest in ourselves for 30 years. We have, in fact, been asset-stripping – while China has done the opposite," Roberts said, adding that "research and development spending is almost 100-percent domestic," and "China, whose economy is 30-percent larger than ours, outspends [the U.S.] five-to-one on research and development."
Attorney General William Barr suggested aligning U.S. support for European telecom equipment leaders Ericsson and Nokia in a Feb. 6 speech on Chinese innovation.
"Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies," Barr said.
Papa said there are two issues with making these two telecom companies the face of U.S. 5G infrastructure.
"Ericsson and Nokia are the most credible alternatives to Huawei in the current release market and on high-end markets right now, but they're not going to disrupt Huawei," he explained. "Nokia, in the last 10 years, has only acquired market share of less competitive companies, and Ericsson bribes its customers to buy its products. Is this the behavior of companies trying to disrupt Huawei?"
Other lawmakers still want an American alternative to Huawei to ensure than the U.S. remains competitive with Chinese innovation and the aftermath of 5G, which will mean improved artificial intelligence capabilities and the new technology that comes with it.
"We need to do more to shore up our own network defenses against hackers and state-sponsored actors, especially in our nation's rural and underserved communities. This effort will require the development of a comprehensive strategy to secure the telecommunications supply chain," Senate Commerce Committee Chair Roger Wicker said in November.
Sen. Mark Warner in January introduced legislation called the Utilizing Strategic Allied (USA) Telecommunications Act to invest $1 billion in Western alternatives to Huawei and Chinese equipment provider ZTE.
"Every month that the U.S. does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while U.S. and Western companies and workers lose out on market share and jobs," Warner said in a statement at the time.
"Widespread adoption of 5G technology has the potential to unleash sweeping effects for the future of internet-connected devices, individual data security, and national security. It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose," he added.
The Senate passed a bill on Feb. 27 to provide $1 billion to small U.S. telecom companies as reimbursement for the potential problems that may come with repealing and replacing Huawei equipment used in rural areas with other, likely more expensive, hardware.
Republican Sens. Tom Cotton of Arkansas, Ted Cruz of Texas, Josh Hawley of Missouri and Marco Rubio of Florida have also proposed legislation on March 4 that would require the U.S. Committee on Foreign Investment to reconsider the U.K.'s place on a U.S. whitelist that exempts Australia, Canada and the U.K. from being scrutinized for their foreign business dealings.
The move came after the U.K. decided in late January to give Huawei limited access to build select parts of its new high-speed mobile network, despite the U.S. push for allies to ban the Chinese company.
“Huawei is a global espionage operation masquerading as a telecom company. As a critical member of the Five Eyes alliance, Britain is putting the national security of the U.S. and our allies in jeopardy by allowing Huawei to build its 5G infrastructure," Cruz said in a statement. There is no way to protect a 5G network from compromise once a company like Huawei is inside."
U.S. efforts in expanding American 5G and promoting the development of new equipment are moving in the right direction, but Papa says the Defense Department needs to get more involved in the advancement of the communications chips to accelerate the process.
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