This report was written by FP Analytics, the independent research division of Foreign Policy; access to the executive summary of 5G Explained is made possible with support from Nokia.
5G technology is set to revolutionize the internet as we know it. It will increase network speeds, enable the Internet of Things (IoT) by bringing billions of more devices online, and advance new technologies such as artificial intelligence (AI) and machine learning. Despite this transformative impact, the majority of businesses still do not know what 5G is and what it could do.
The “race to 5G” has been widely publicized (and state of development wildly embellished), but the fundamental issues and realities underpinning the transition to 5G technology are still widely misunderstood. Building 5G networks requires extensive global coordination among governments, private companies, and regulatory bodies. It is an ongoing process that will unfold over the next decade at different paces in different countries. As this process occurs, understanding the stages of 5G development in different markets and accurately timing investments will be crucial for businesses. 5G technology will bring broad benefits and widespread risks globally, but there will likely not be one clear-cut winner. Despite this, intense geopolitical competition surrounding 5G is developing, and the results of this competition will have long-lasting and far-reaching effects.
While innovation on 4G networks was largely dominated by the United States and other Western countries, since 2012, China has made a coordinated effort to dominate the build-out of 5G networks and determine operating standards around the world. Chinese omnipresence in 5G infrastructure rollout, embodied in its national telecommunications leader, Huawei, has raised security concerns for Western and other countries and has moved the 5G debate from the technical realm into geopolitics.
China’s push to lead in 5G infrastructure development, combined with long-running U.S. concerns over Huawei’s alleged intellectual property theft, prompted President Donald Trump’s signing an executive order banning Huawei from accessing U.S. supply chains in May 2019. The move sparked a direct confrontation between the U.S. and China over 5G, putting the two countries directly at odds over 5G technology platforms and forcing other countries to take sides. Without a direct competitor to Huawei, the U.S. has moved toward European and South Korean competitors Nokia, Ericsson, and Samsung, and it is strongly urging allies to do the same.
However, Huawei’s competitive position cannot easily be diminished. Huawei’s 2019 revenue was four times greater than Nokia’s or Ericsson’s, and it owns more patents on essential telecom technology than any of its competitors. Further, Huawei played an essential role in the development of 4G networks globally and has its equipment and services already deployed in 170 countries. Already, the majority of countries in Europe, Asia, Africa, and Latin America have begun working with Huawei to develop their 5G networks. For the U.S., unseating Huawei will be an uphill, if not insurmountable, battle.
In FP Analytics’ three-part Power Map Series, 5G Explained, we break down the key issues surrounding the development of 5G networks and the confrontation between the U.S. and China over 5G by:
Identifying the key players in 5G technology and infrastructure development;
Detailing the global competitive landscape, including issues along supply chains, influence on standards, and forces driving investment decisions in markets around the world;
Pinpointing key national security concerns, many of which are currently going unaddressed;
Breaking down the emerging geopolitical competition over 5G; and
Cataloguing a range of risks and opportunities for businesses.
This FP Analytics Power Map provides the most comprehensive assessment of the issues surrounding 5G to date and provides critical 5G analysis across the technical, economic, geopolitical, and security realms. Beyond the hype and hyperbole, this comprehensive overview provides businesses with an indispensable tool to help better understand the risks and opportunities with 5G.
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