WCA September 2019

Telecom news

Huawei – a story that won’t go away

(VESA) called on the Commerce Department to specify whether or not Huawei can remain as a member of US-based industry consortia. They added that the Temporary General License announcement of 20 th May, that allowed a grace period for US companies to engage with Huawei if they met certain criteria, has “created a serious problem of uncertainty.” That licence enables Huawei to continue its work with a set of named industry consortia engaged in 5G developments, including ETSI, the 3GPP, the IEEE, the IETF, the ITU, the GSMA, the TIA and the ISO. The signatories of the 14 th June letter, however, want that exemption extended to all standards, speci- fications, and certification groups, and want the exemption made permanent. US government wants production outside China On 24 th June, The Wall Street Journal reported that the US government has started a 150-day review of the US telecom supply chain. The process, also reported by Telecompaper. com [“US government considers making manufacturers produce US-bound equipment outside of China”] is asking telecom equipment manufacturers if they could make US-bound equipment outside China. The request would affect the manufacture of towers and software, among other products, and would force companies such as Nokia or Ericsson to move operations from China in order to service the USA, their biggest market for telecom equipment and infrastructure. According to analysts, China last year represented 45 per cent of Ericsson’s manufacturing-facility area and 10 per cent of Nokia’s, not including subcontractors. The USA itself does not manufacture mobile equipment. The White House declined to confirm or comment on specific discussions. “The fourth industrial revolution will be built on the telecommunications networks being constructed today,” a Trump administration official said. “It is critical that those networks be trusted.”

acquisition. Mr Piecyk’s comments follow an announcement by FCC chairman Ajit Pai that the commission could auction an unused portion of the band for 5G and will vote on the proposal on 10 th July. Mr Piecyk noted that mid-band spectrum has become an increasingly important component for 5G as millimetre wave spectrum continues to be saddled with performance and coverage issues. The analyst also explained that the Educational Broadband Service (EBS) portion of the 2.5GHz band being targeted by the FCC order is “quite messy” (it’s not licensed on a traditional geographic basis). He notes that the plan is to convert the lower EBS blocks and the so-called J-block into one 100MHz spectrum block, and expand to 106MHz by tacking on the BRS (Broadband Radio Service) spectrum block plus an upper 88MHz spectrum block. That would make for 194MHz of contiguous spectrum, if combined: “Which is likely, given Sprint’s ownership in both bands,” Mr Piecyk explained. “This proposed FCC auction will enable Sprint to convert a licensing scheme that involves a bunch of overlapping coverage circles to one that is done on a county by county basis.” But he also warned that the auction rules don’t enable winning bidders to force incumbent EBS users off the spectrum, a situation that could, again, favour Sprint, which has been sub-leasing some of that capacity from educational institutions. “For example, if Verizon was an auction winner, an incumbent licensee in that county could still sell their licence to Sprint or AT&T or whomever,” Mr Piecyk wrote. “So why would AT&T or Verizon bid for spectrum that effectively only gives them access to low-population areas that surround Sprint?” He suspects that Sprint has long-term leases with rights of first refusal on any sale, giving the company “a material advantage” in the bidding process. But, Mr Piecyk added, Sprint could come up against some “hold-out licensees” in the 2.5GHz band in markets such as New York City that might try to aggregate the full block. If that’s the case, Sprint could be required to pay a premium to buy them out, which could cost between $1 billion and $2.5 billion.

In Telecom Ramblings in June, Rob Powell wrote that Huawei is selling its stake in Huawei Marine to Hengtong Optic-Electric Co [“Huawei to sell subsea cable biz”]. Huawei owns 51 per cent of Huawei Marine, the other half being owned by Global Marine Systems. The division generated CNY394 million, or $57m, in 2018, which, of course, is a tiny piece of Huawei as a whole. But pretty much all of that business has exposure to Huawei’s overall political troubles these days. How will this change if the company is 51 per cent-owned by Hengtong? Well the ownership is still Chinese, but not specifically called out by the Trump administration. That means they may be able to access US-based software and components. The question is whether the cloud will follow them, or will the current political weather stay with the parent company.  The deal likely hopes to preserve existing projects, given how quickly Huawei’s US partners on other fronts have been bailing. It’s harder to replace a subsea contractor mid-stride or, at least, it takes quite a bit longer. Appearing in Telecompaper.com was news that 26 technical specifications and standards bodies have written to US commerce secretary Wilbur Ross. Their letter requests clarification on the legality of Huawei’s continuing contribution to their development work, in view of the US move to block the Chinese company from doing business with American companies. In the letter, dated 14 th June, the standards bodies expressed concern that any rulings that exclude Huawei from participation in their work could lead to “standards wars.”  Organisations including the Broadband Forum, Ethernet Alliance, MulteFire Alliance and Video Electronics Standards Association Standards bodies call on USA to clarify Huawei position

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Wire & Cable ASIA – September/October 2019