Huawei controversy opens field for 5G challengers

Customers look at Huawei smartphones at a flagship store in Shanghai. Huawei plans to strengthen the brand in its core domestic market. (AFP)
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Updated 29 June 2020

Huawei controversy opens field for 5G challengers

  • Current situation offers opportunity to firms like NEC and Samsung to shine

TOKYO: With growing pressure to keep China’s Huawei out of 5G network development, it could be time for firms like Japan’s NEC and South Korea’s Samsung to shine.

Washington has pushed allies to bar Huawei, a Chinese telecom giant, from building next-generation 5G mobile networks, claiming its equipment can be used to spy for Beijing.

Huawei denies the charges, but US pressure has prompted an about-turn in Britain.

The government had already pledged to cut the firm out of the most sensitive “core” elements of 5G that access personal data, and is now reportedly pushing for plans to end Huawei’s involvement in Britain’s 5G infrastructure by 2023.

But excluding Huawei is not without challenges, because there are currently only two alternatives in Europe for 5G equipment such as antennas and relay masts: Finland’s Nokia and Sweden’s Ericsson.

Britain has encouraged Washington to form a club of 10 democratic nations that could develop its own 5G technology, but there has been little movement so far.

“The vast majority of the commercial networks sold in the world come from the big three,” said Sylvain Chevallier, in charge of telecoms at BearingPoint consultancy, referring to Huawei, Nokia and Ericsson. “But a world of three is not good for operators, and if it goes down to two it will be worse still,” he told AFP.

That leaves a tempting potential opening for telecoms firms like Samsung and NEC. But building a successful 5G network is no simple task.

That is a lesson Samsung has already learned. Despite being a major player in 3G, it found itself unable to compete with the big three on 4G and struggled to win commercial contracts.

“This has been a challenge for Samsung,” said Daryl Schoolar, a mobile technology specialist at consulting group Omdia.

In building its 5G network, Samsung has so far focused on North America and parts of the Asia-Pacific region.




The logo of NEC, Japan’s electronics and information technology company, is displayed at the firm’s headquarters in the capital Tokyo. (AFP/File)

“So while operators may feel uncertain about Samsung Networks, they are much further along in the process of being a global presence than NEC,” Schoolar added.

NEC does have some advantages, including a partnership in Japan with mobile operator Rakuten.

The firms have already cooperated on a 4G network and are now jointly developing a 5G system.

The Japanese firm is also a leader on undersea cables, fiber optic networks and — thanks to its affiliate Netcracker — logistics management software.

“Netcracker has a strong presence with operators in Europe, which could be a real entry point for NEC,” said Stephane Teral, chief telecoms analyst at LightCounting, a market research firm.

NEC is tightlipped about its contracts for mobile networks, saying only that it is holding feasibility demonstrations for “a number of customers and we are engaged in commercial discussions with others.”

Britain’s government has reportedly asked both NEC and Samsung to take part in demonstrations as it looks to diversify its 5G options.

And on Thursday, NEC announced a tie-up with Japanese operator NTT intended in part to speed up the development of a 5G network.

Samsung and NEC joined forces 2 years ago and have launched a joint marketing team to offer 5G products to European and Asian markets.

Still, the path ahead will be tough, said Schoolar.

“I think it’s a major challenge for NEC. It requires more than radios, it requires investing in people who can do system integration, sales, customer support, network design and engineering,” he said.

“Plus NEC will need to build operator trust that they will be there to support them in 5 to 10 years as those 5G networks evolve.”

Washington has backed the use of nonproprietary technology like Open RAN in 5G development, hoping it will provide an entry point for US firms.

Such a move would open up opportunities for NEC, allowing them to “create an economic model that would shake up traditional equipment manufacturers,” said Chevallier.


Libya’s NOC says production to rise as it seeks to revive oil industry

Updated 22 September 2020

Libya’s NOC says production to rise as it seeks to revive oil industry

  • Libya produced around 1.2 million bpd – over 1 percent of global production – before the blockade
  • Libya’s return to the oil market is sustainable

LONDON: Libya’s National Oil Company said it expected oil production to rise to 260,000 barrels per day (bpd) next week, as the OPEC member looks to revive its oil industry, crippled by a blockade since January.
Oil prices fell around 5 percent on Monday, partly due to the potential return of Libyan barrels to a market that’s already grappling with the prospect of collapsing demand from rising coronavirus cases.
Libya produced around 1.2 million bpd — over 1 percent of global production — before the blockade, which slashed the OPEC member’s output to around 100,000 bpd.
NOC, in a statement late on Monday, said it is preparing to resume exports from “secure ports” with oil tankers expected to begin arriving from Wednesday to load crude in storage over the next 72 hours.
As an initial step, exports are set to resume from the Marsa El Hariga and Brega oil terminals, it said.
The Marlin Shikoku tanker is making its way to Hariga where it is expected to load a cargo for trader Unipec, according to shipping data and traders.
Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports.
NOC insists it will only resume oil operations at facilities devoid of military presence.
Nearly a decade after rebel fighters backed by NATO air strikes overthrew dictator Muammar Qaddafi, Libya remains in chaos, with no central government.
The unrest has battered its oil industry, slashing production capacity down from 1.6 million bpd.
Goldman Sachs said Libya’s return should not derail the oil market’s recovery, with an upside risk to production likely to be offset by higher compliance with production cuts from other OPEC members.
“We see both logistical and political risks to a fast and sustainable increase in production,” the bank said. It expects a 400,000 bpd increase in Libyan production by December.
The Organization of the Petroleum Exporting Countries and allies led by Russia, are closely watching the Libya situation, waiting to see if this time Libya’s return to the oil market is sustainable, sources told Reuters.