The Race to 5G Dominance

Written by Jennifer Clark
Posted February 20, 2019

5G is the next generation of wireless technology. It’s going to bring the connectivity that the world will soon depend on. As more devices and technologies require faster speeds of connectivity, the demand on 5G will get heavier. That’s why we’re reaching a critical point as 5G begins to ramp up.

5G stands for “fifth generation.” It will be the standard for mobile telecommunications services. The technology will use a higher-frequency band of the wireless spectrum that will allow for data to be transferred more quickly.

Industry analysts estimate that there will be at least 21 billion internet-connected devices by the year 2020. That includes phones, tablets, computers, home appliances, cars, dog collars, and anything connected via the Internet of Things. We’re going to need something faster, stronger, and more reliable to ensure those devices reach their full potential.

Because 5G will be the next generation, the race is on right now for some of the biggest tech companies to grab a piece of the action. These companies want to reap the rewards that come with a new industry and new demand.

This has a lot of companies and nations hungry for this new opportunity. Things are really heating up — just take a look at recent news of the U.S. and Chinese tech firm Huawei.

Huawei has already started building the next generation of wireless networks, and the U.S. has a problem with that. The U.S. has been trying to persuade other countries to join it in not allowing Huawei equipment into the new 5G networks out of fear that it could be used by the Chinese government for spying.

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Stéphane Téral, a mobile telecom infrastructure expert at research firm IHS Markit, said, “Banning Huawei will create a vacuum that no one can fill in a timely fashion and may seriously impair 5G deployments worldwide.”

Huawei has denied these accusations from the U.S. and has told other countries that it has no plans of spying. Huawei’s founder and chief executive, Ren Zhengfei, has pledged to not share any customer information. In an interview, he said, “For the past 30 years, we have never done that. And (for) the next 30 years to come, we will never do that.”

The technology is needed, and the demand is only getting more significant. Huawei has been working on its telecommunications equipment for some time, so it’s ahead of a lot of its competitors, which makes it even stranger that the U.S. would want to ban the one company that’s ahead of the game.

The U.S. doesn’t have a competitor to Huawei. Huawei’s biggest rivals are Ericsson and Nokia, but both of the companies have struggled with losses and job cuts for years, while Huawei gets even stronger. Huawei has generated annual revenue of more than $100 billion.

If the U.S. aims to remove Huawei as top player in 5G technology, then there should be a company that is relatively equal to Huawei so that 5G technology can move forward.

This week, Germany says it’s not ready to ban Huawei. The country isn’t ready to exclude Huawei from its 5G network, but instead it will be amending laws so that untrustworthy manufacturers could still provide equipment. Bjorn Grunewalder, a spokesperson for the Federal Interior Ministry (BMI), said:

A direct exclusion of a particular 5G manufacturer is currently not legally possible and not planned. For the BMI, the focus is on adapting the necessary security requirements so that the security of these networks is guaranteed, even from a producer that may not be trustworthy.

The 5G race is heating up, and it will most likely get even hotter in the years to come. The U.S. better have some type of backup plan if it sticks to its ban on Huawei.

Until next time,

Jennifer Clark
Pro Trader Today

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