Tuesday , October 26 2021

Huawei believes it will be difficult for telecom operators to justify the cost of not using their 5G equipment – Telecom – Business


The Huawei crisis is global and the Chinese company is defending itself against rumors and accusations around the world.

In Norway, the government, with Scanning Minister Nikolai Astrup (H), is at the forefront of finding out whether to exclude companies from countries that do not cooperate with security policy, not Huawei, in the struggle to provide equipment.

The debate so far has been about security, but it is also a question of price.

Huawei has already delivered 4G equipment to Telenor and Telia. The technology manager of the company, Robert Scanlan, who was in Norway this week says that it will cost a lot if you do not build the 5G network on top of existing equipment.

"It will be difficult for a mobile operator to justify such a cost," says Scanlan, who believes that an exchange of network equipment will go beyond the margins of any telecom operator.

– This is a big challenge. Both because of the price, simplicity and time to market, it will be natural to expand the 5G network on top of existing 4G equipment, he says.

Billions of bill

However, it is not known how much it will cost extra to build 5G on 4G equipment from another vendor.

If the government decides that Huawei equipment is not safe enough, it is also possible that someone has to pull out all existing equipment. Both Telia and Telenor have thousands of base stations built on Huawei products.

"There is not a dollar, but billions tell Scanlan about the extra expenses.

The head of Huawei reporting directly to the founder and CEO of the company, Ren Zhengfei, says he does not have an exact number of how much it would cost if you did not use Huawei's 5G equipment, since he did not know the specifications of the competitors.

– This is your biggest advantage in the fight to deliver 5G equipment in Norway, which already has 4G equipment?

"It's an advantage, of course.

The Chinese technology giant landed in the middle of the US-China trade war, and President Donald Trump banned US companies from collaborating with Huawei.

The United States also urged countries around the world to use manufacturer equipment because of security concerns related to Chinese authorities' spying, and the PST also warned the company at home in Norway.

Teacher: It's not easy.

Olav Lysne, director of Simula Metropolitan and a professor at the University of Oslo, also believes it will be costly for Norwegian companies to switch suppliers.

"What we can determine is that it's not easy to switch supplier, and that's going to cost money," Lysne tells E24.

He still believes that this is not impossible.

– When operators chose the 4G supplier, they probably thought they wanted a real contest when the 5G was lit. It would surprise me if they did not plan for something to happen in the meantime, says Lysne.

Analysts at Arctic Securities, Henriette Trondsen, are following Telenor and say that it is not a good thing or pricing in Telenor that the company will have to use different suppliers in the 4G and 5G network.

It further believes that as long as there are no more challenges around Huawei, this will not affect Norwegian companies.

– Today, challenges with Huawei are not a problem. The 4G network needs regular expansion and maintenance, which is not as critical in delivering equipment as during a major development. If problems with Huawei last for several years, this could affect the current 4G network in the delivery of equipment, says Trondsen.

At the same time, she says that this is not a big threat in the short term.

Trondsen is more concerned that the situation creates a "tightening" on the 5G equipment, and that it may delay the Norwegian 5G development again.

Concerned Customers

Scanlan has been with Huawei for 11 years and works at the company's headquarters in Shenzhen. He was in Norway to talk to customers about the company's 5G equipment, which was displayed at Telenor's headquarters in Fornebu, just outside Oslo.

He says there are three questions that customers ask him.

– Many people have questions about the security of US charges. The second question is about the technician with 5G, if they actually get faster. The last question is about continuity if someone can still use Huawei's phones and equipment in the future if the conflict with the United States continues, which of course we can do, "says Scanlan.

The case continues under the announcement.

In addition, when Huawei was involved in the battle to provide 4G equipment, the PST and the security authorities were cautious, but one chose to disregard it.

Scanlan believes that the reason it is different when it comes to 5G is that the United States are pushing harder to avoid choosing the company.

The technology manager believes that Trump's claim that the charges against Huawei may fail, if China and the United States establish a trade agreement, is proof that the case has nothing to do with security.

Telenor does not respond if it will cost much more with equipment from another supplier, but points out in an email and, as previously known, that both Ericsson and Nokia will deliver a modernization of the core of the mobile network in Norway.

Telia does not want to comment on hypothetical scenarios, but says they, as acquaintances, work with several different vendors in developing socially critical infrastructures, including Huawei and Ericsson.

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