The ever-increasing demand for higher bandwidth, connected devices, and improvised quality of service has placed digitalcellular networks at the cusp of 5th Generation (5G) of their evolution. Put together, the bouquet of technologies such as Network Function Virtualization, Network Slicing, massive Multiple Input Multiple Output, Software Defined Networks and utilization of Millimetric Band, will enable mobile broadband with data speed of the order of 20 Gbps, massive device connectivity, and reliable low latency mobile networks. This will not just open up futuristic technology applications such as autonomous vehicles, robots performing remote surgeries, and Virtual Reality, but also serve as a key driver of socioeconomic transformation, yielding new business models, jobs and growth prospects.Beyond the euphoria 5G has generated, the rising backlash against Huawei has left it forbidden from supplying telecommunication equipment to at least half a dozen countries. India, the second largest subscriber base for telecom services in the world, has allowed Huawei to participate in 5G trials at the moment. However, the final call over its role in 5G network deployment will be considerate of security constraints, trade compulsions and political calculus.
China, which began as a low-end manufacturing hub for leading equipment makers, gradually moved up the value chain. Chinese enterprises have evolved from production houses to avid contributors to the mobile standards development over the last three decades, even challenging the position of established players such as Ericsson and Nokia. Ever since Chinese telecom equipment manufacturers, especially Huawei and ZTE, began expanding their global footprint, they have been under the security scanner. Their ability to develop Intellectual Property, alleged links with the government and the military, and the potential use of their equipment for surveillanceby the Chinese state have always been questioned.For Huawei, scepticism stems from its proximity with the Communist Party of China and the employment history of Ren Zhengfei with the People’s Liberation Army. Huawei, however, refutes these allegations and boasts its spending on R&D – one of the highest amongst its competitors. As early as 2002, it was investing 18.8 percent of its revenue in R&D – higher than any other domestic company or foreign companies in China. It has a vast network of 18 R&D facilities across eight European countries, leveraging global expertise in the science and technology of mobile communications. It also supplies products and builds solutions for around 1500 telecom networks across 170 countries, which helps connect one third of the world’s population. The fact of the matter is that Huawei is tightly knit with the global telecom R&D and production supply chains.
The US is leading the charge against Huawei, even to the extent of pressurizing its allies and the members of the Five Eyes alliance to ban Huawei from their respective 5G network deployments. Huawei has a long history of legal battles with its American competitors over the accusations of intellectual property theft.Cisco in 2003, Motorola in 2010, and T-Mobilein 2014, had filed lawsuits against Huawei for copyright violations, stealing of trade secrets and industrial espionage.Beginning 2012, Huawei has been subject to numerous reviews and investigation, both by the intelligence agencies and the law making bodies in the US and elsewhere. Huawei has also stood a close scrutiny by the Western media outlets and prominent security think-tanks. Stirring the present controversy in the middle of the trade-war with China, the US National Defense Authorization Act for Fiscal Year 2018 forbade federal agencies from using technology and services from Huawei and ZTE Corporation. Huawei was charged and later indicted for bank fraud, theft of trade secrets and breach of American sanctions on Iran. In view of the criminal proceedings, Huawei’s Chief Financial Officer, Meng Wanzhou was arrested in Canada in December 2018 at the request of the US. This was followed by a Presidential Executive Orderin May 2019, effectively authorizing the Bureau of Industry and Security of the US Department of Commerce to designate Huawei and its affiliates to the Entity List. The US has aggressivelypersuadedits allies to ban Huawei from their 5G rollout plans. Countries like Australiafell in line, but others like the UK and Germany have contested – devising their own plans based on independent risk assessment of threats from Huawei to their telecommunications infrastructure.The tug of war over the role of Huawei in 5G network deployment has forced countries to take sides, essentially constraining their options.
Huawei’s presence in India dates back to 1999, when it had setup R&D facility in Bangalore. Huawei has a prolonged presence in India’s telecom infrastructure. It has supplied equipment to two of the three private sector telecom service providers, as well as to the state-owned telecom enterprises. Huawei’s expansion in India has always been looked through the prism of suspicion, and 5G is no exception. Way back in 2009, the Intelligence Bureau and the Ministry of Defence had advised that BSNL should not award telecom equipment contracts to Chinese equipment majors Huawei and ZTE in the interest of national security. The reports of security breaches, such as the one from 2014 when Huawei allegedly hackedBSNL’s mobile base station controller,have kept the pot boiling. Despite warnings, Huawei has continued to make inroads into the cost-sensitive Indian telecom market. Since the telecom revolution, numerous attempts have been made to cultivate a vibrant domestic telecommunication design and production industry. The results, however, are not satisfactory and India has to meet its vast demand for equipment with imports.
India’s telecom sector depends heavily on imports for network deployment. As of 2018, imports accounted for a whopping 90 per cent of India’s overall telecommunication equipment market. The deployment of 5G networks in India would certainly depend on imported equipment. The fact that Huawei’s equipment works out 20-30 percent cheaper than its competitors makes it an obvious choice for price-sensitive markets like India.If India decides to go ahead with 5G deployment in the near future, Huawei’s equipment is likely to be a good value position for the debt-ridden and financially weak telecom service providers.
It is important to underscore that Huawei was left out of the initial callby the Department of Telecommunication in July 2018 for 5G trials in India.In early October 2018, Huawei was invited to participate. Huawei’s inclusion does indicate that the backchannel negotiations turned the tide in Huawei’s favour. China’s ambassador to India has also been quite vocal about the 5G issue, and advocated strongly in the favour of Huawei. As a counter to the aggressive American lobbying against Huawei, China did not hesitate from warning countries with “reverse sanctions” or “economic repercussions”.
Notwithstanding the fact that Huawei is very much part of 5G trials in India, India’s final decision to let Huawei bid for India’s 5G rollout should be in line with the national interest – notoverlooking the security risks. Since the risks to India’s telecom infrastructure are common from all foreign vendors, the realistic solution is to elevate security assurance criteria. Comprehensive security testing and strict adherence to the criteria can reduce the risks to an acceptable level. India can explore the possibilities of establishing an evaluation centre with foreign vendors, based on the lines of Huawei Cyber Security Evaluation Centre in the UK.
A close investigation of the previous incidents of security breaches, threats from foreign telecommunication equipment manufacturers in general, or the Chinese telecommunication equipment manufacturers in particular, may help in accurate evaluation of the risks involved. Along with geopolitical analysis, it should include scrutiny of the engineering processes, cyber security processes and vulnerabilities,and assess the possibilities of backdoors in the imported equipment. India urgently needs anindependent assessment of the security risks from foreign telecom vendors, and a booster plan to catapult sluggish domestic telecom industry into a globally competitive one.
Disclaimer:Views expressed are of the author and do not necessarily reflect the views of the Manohar ParrikarInstitute for Defence Studies and Analyses, the Government of India, or the Manipal Advanced Research Group.
The article draws excerpts from the monograph, titledThe Road to 5G: Technology, Politics And Beyond, published by the author in 2019.
Munish Sharma, Consultant in the Strategic Technologies Centre, Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi.
