The article below was written for the InsideTMN Newsletter, sent on Friday 7 June. To receive the newsletter directly, sign up here.
Over in the UK the over-promoted (in both senses) UK Foreign Secretary Boris Johnson had some remarks of his publicised, either in accordance with or against his wishes. One throwaway line from the Foreign Secretary was that China is about to win in tech, “They have got 5G. They have found out a way”. Moreover, everyone is going to be “getting stuff on their gizmos through the Chinese system. Not the American one”.
Leaving Johnson’s specific ignorance to one side, let’s take apart this wider idea of a country “winning” in 5G, because it’s a surprisingly common trope. The spectre of the “wrong” country winning in 5G is used by lots of lobbyists in lots of countries to justify lots of things including but not limited to: looser site planning regulations, free or very cheap spectrum, corporate mega-mergers, net non-neutrality, state-funded fibre rollouts, even the imposition of government-owned 5G network infrastructure.
In all of these cases, the lobbyists’ warning is that unless the desired lobbying point is granted the country or region in question will somehow “lose” 5G and see another win.
So how could a country or region win in 5G anyway? There are two interpretations.
The first is that a specific country is ahead of others in rolling out 5G networks. The second is that a specific country or region dominates the technology landscape for 5G, securing more patents, selling more of its equipment.
Let’s take the first one. Of course, some countries will roll out 5G before others. Do they gain an ever-lasting economic benefit, to the detriment of others, by doing so? Certainly, there are economic benefits directly related to better connectivity. So there’s every reason for countries to want to get ahead with creating the conditions for better rural coverage for social inclusion, better transport services, more efficient power and manufacturing sectors, new opportunities for content, media and retail companies. And so on. Therefore, absolutely yes let’s foster the right investment environment for 5G.
But why is doing all this before other countries do it of any importance, besides reasons of boasting across the G20 dinner table? Let’s take one argument, the best connected society will have the best environment for inward investment, attracting global capital flows in tech and also into smart manufacturing. How then do we explain US tech dominance following the standards and spectrum hotch-potch that gave it 3G basket-case status. How do we explain the current rise of China given that country’s relatively late surge to 4G? And so what if China transforms its manufacturing environment 12 months before, say, Europe, is that it for the European manufacturing sector? How do capital flows move around the world – is a country going to hoover up sectoral investment on such a lead? Unlikely. Maybe not impossible in some very narrow cases, but unlikely.
So what about the other idea – that a specific country will dominate the technology landscape for 5G. This is even weirder and quickly dispensed with. These are globally ratified standards, produced by a mix of horse trading, consensus and yes, outright R&D muscle. But with large, large companies from Japan, South Korea, Europe and the US all crucial already to 5G, there will be no “Chinese system” for 5G. And there’s no desire in China for there to be one – there’s no 5G SC-CDMA out there. There is, understandably, a huge role for contributions from Huawei and ZTE to 5G standards. That’s not the same thing as a “Chinese system”.
Johnson, as an outsider and clearly as eager a consumer as he was once a generator of strawman theories, gets half a pass. There’s plenty of this sort of talk from inside the industry. At a European operator’s event last year the operator’s European head said that the operator was pressing hard in standards for a “European” flavour for 5G. That’s because it’s important that Europe is not left behind in 5G, he said. But when asked, both at the time and later (as requested), what he meant by a European flavour of 5G he had no answers. It was just a talking point.
And so to the “so what”? Who cares if people want to construct a false “race to 5G narrative”? Doesn’t it create the end benefit of 5G coming sooner, which we all want?
The issue is, the winner/loser in 5G narrative is being used to justify any number of lobbying points, up to and including quite major geo-political elbow jostling. It’s time for those inside the industry who would rather not see 5G used as the reason to excuse lax or bad policy, and to create or be used as the expression of division between nations, start to resist the false narrative of the race to 5G having only one winner.
