Effective competition is the key to 5G in Europe
In association with Huawei
The Covid-19 crisis has shown the great potential of technology. Starting from solutions to work remotely to meeting friends and family in the virtual world, and with varying degrees of advancement we have seen a first glimpse of solutions evolving addressing the challenge of teaching students online. Moreover, some EU member states have started initiatives to track corona-infections via app-based solutions.
Yet with all the progress and creative approaches we have witnessed, it has become clear that digitisation is just at a starting point. We realise that, for example, in terms of digital learning or with regard to digital tools to predict corona outbreaks, while complying with data privacy rules, there is still much room to grow even for the most advanced economies on the globe. In other words, we expect to become better and better at facilitating digital solutions to real world problems, including such that may help us to face-off a calamity like the corona-crisis.
In this respect many countries are placing great hope on 5G technology – which is at least 10 times faster than the previous mobile telecommunication generation – as a key driver for digitisation and technical innovation. EU member states are striving for a quick roll-out of the most innovative cutting edge technical equipment at affordable prices.
Innovation as a choice
To bring about the expected progress it has long been the strategy of the European Union and its member states to foster competition between the most agile and able organisations. To put it into the words of the Vice-President of the European Commission Margrethe Vestager: “It means that businesses have no choice but to innovate, if they want to keep up with their rivals. And by giving more innovative ideas the chance to reach the market, it gives us a better chance of finding the next big thing – the innovations which will transform people’s lives, and underpin the success of our industry.”
To survive and succeed in such an environment is hard and uncomfortable – as a company you will constantly be kept on your toes. And yet it is also rewarding if you manage to emerge as a technology leader or successfully bring new innovative ideas to market maturity.
Within Huawei innovation has been the cornerstone of our success over the past 30 years. To remain competitive, we invest enormously in research and development, roughly between 10-15% of our revenue every year with substantial investment also in our research and development activities across Europe. This is the primary reason why – according to the Berlin-based market intelligence platform, IPlytics – Huawei is leading in the number of global 5G-patent declaration rankings.
Effective competition also means that we constantly have to win and maintain the trust of our customers – while currently 45 of the 50 largest mobile telecommunication operators are using our technology. This is reflective of the fact that operators are selecting appropriate vendors based on sustainable long-term business strategies, maximising value for the digital transformation process, while strongly emphasising network resilience and data security.
Recently the European Commission has adopted the EU toolbox highlighting in particular the need to coordinate member states in terms of 5G security. Most countries have taken a pragmatic approach, eg most recently Germany with the draft IT Security Law 2.0. Huawei strongly supports the increased emphasis on security. In fact, the company is leading the field in terms of transparency, with various security centres across Europe, and is top of the list for security contributions to the most relevant standardisation associations.
Secure standards
At the same time we believe that it is important to combine the highest standards on security with diversity and competition. In fact diversity, customer choice and competition are all prerequisites to ensure 5G security in telecommunication networks.
The strength of the EU electronic communications markets and in turn of the EU economy has always been derived from the freedom which operators have enjoyed in the choice of the most suitable and advanced equipment suppliers, resulting from the application of truly open and competitive markets. Limitations as to the ability for some suppliers to operate on the market would deprive the EU from the benefits of competition, while re-instituting special rights for the remaining competitors in violation of European Law.
When looking beyond the EU and its common market, the EU prides itself for its support of multilateral institutions. In this context a ban of certain vendors – de facto due to their country of origin – would raise serious concerns with regard to compliance with applicable WTO-laws protecting international trade. Excluding one supplier would lead, furthermore, to enormous economic loss for the entire industry with the potential of significant cost increases for European economies. According to a study by Oxford Economics the negative economic impact in European countries may amount to €3 billion – an increase ultimately born by consumers in higher prices for 5G connectivity.
But there are not only economic costs to consider. Stifling competition could mean to miss out on the next big thing, or maybe an innovation that will help us to work through another crisis. Economic progress and digital innovations are crucial for improvements of our day-to-day well-being and may ultimately help us to save lives when facing a situation such as the corona-pandemic. And yet advancements in digital technology depend on effective competition on the European market, while allowing all the leading innovators in our industry to contribute to the greater good for all.
Huawei is honored to be playing an important role in building telecommunication network infrastructure in Europe for more than 20 years. We are committed to continue to earn the trust of our European partners by contributing to the technological progress based on and supported by the highest standards of security available and necessary for the roll-out of 5G.
Jan Bredehoeft is associate director, West European Legal Department, Huawei Technologies
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