Huawei’s recent woes won’t affect global 5G rollout: Deloitte

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Research analytics firm Deloitte says Huawei’s recent run-ins with federal governments and cybersecurity concerns won’t affect the rollout of 5G in 2019.

Duncan Stewart, Deloitte’s director of research, said to MobileSyrup that while the firm was writing its predictions for its annual Technology Media & Telecommunications Predictions report, researchers took note of anything that would affect 5G’s rollout.

The report, released on December 11th, 2018, says that by the end of 2019, 25 operators around the world will have launched 5G service (mainly in cities) and about 20 handset vendors will launch 5G-ready handsets. Deliotte expects smartphone OEMs will ship some 1 million 5G handsets by the end of the year. The report says that this is out of the 1.5 billion smartphone handsets it expects to be sold in 2019.

“While we were writing the predictions we knew all of this [with Huawei] was going on, and it doesn’t really change the million,” Stewart said.

“When we talk about Huawei, in the network, there are different parts. There is the core network, the edge network, and then there’s beyond the device. So as far as Deloitte is forecasting, we came up with these numbers and published these numbers while there were already rumours in the press in multiple countries, not just about Huawei but about ZTE and trade wars.

“Therefore our prediction already has built in the possibility that there could be various kinds of countries restricting, preventing, and exercising moral suasion on their allies.”

Huawei has been in Canada since 2008 and has launched various handsets, including its most recent, the Mate 20 Pro. The Shenzhen-based company’s chief financial officer, Meng Wanzhou, was arrested in early December in Vancouver on the suspicion that she violated U.S. trade sanctions against Iran. She was granted bail but faces extradition charges.

In the aftermath of Meng’s arrest, Canada has seen several of its citizens arrested and its trade relationship with China deteriorate.

Canada has also been warned by three of the countries in the Five Eyes intelligence-sharing alliance. New Zealand, Australia, and the U.S. have restricted carriers in their jurisdictions from purchasing telecommunications equipment from Huawei. Canada and the U.K. continue to work with Huawei.

Deloitte says these concerns won’t affect the number of 5G-enabled handsets sold, which will equate to about one percent of all smartphone sales, with sales taking off in 2021, “the first year in which retailers will sell more than 100 million 5G handsets,” the report said.

Consumers will experience peak speeds of gigabits per second, and sustainable speeds estimated to be in the hundreds of megabits per second. The report added that 5G will mainly be used by smartphone devices, used to connect less mobile devices like modems or hotspots, and as 5G fixed-wireless access (FGA) devices that are mounted on buildings to give broadband access to buildings.

It is important to note that these 5G devices will operate over traditional and new cell radio frequency bands that include the low- (sub-1GHz such as 700MHz), mid- (1.6GHz, around 3.5-3.8GHz), and millimetre-wave (mmWave, such as 28GHz) ranges.

“5G FGA devices will often operate using mmWave Technology, which offers the potential for higher bandwidth than sub-6GHz frequencies. Because mmWave frequencies struggle to penetrate walls or pass through certain types of glass, many 5G FWA devices will require mounting antennas on windows or a building’s exterior wall,” the report said.

Canada needs 3.5GHz for 5G, most phones not coming to Canada yet

In Canada, several industry leaders have said that while mmWave is a key spectrum for 5G, 3.5GHz spectrum will provide ubiquitous coverage and is supported by more phones.

Chip-making giant Qualcomm noted in its 2016 report that it considers the spectrum band to be the primary band suitable for the introduction of 5G in Europe.

“In order for Canada to keep pace with other nations and regions around [the] world, we urge ISED to make the 3.5GHz band available for commercial mobile use as soon as possible,” Qualcomm said.

Other players like Bell, Telus, and telecom infrastructure company Nokia have also joined in the plea.

In June, Innovation, Science, and Economic Development Minister Navdeep Bains announced 3.5MHz spectrum auction consultations. The auction is set for sometime in 2020.

“We know that industry wants access to this spectrum,” said Bains. “Our proposals align with international trends in the band and represent an important step toward ensuring 3,500 will be available to meet consumer demand for 5G.”

Bains also noted that Canada will participate in the mmWave auction that is set for 2021.

“In the meantime, we have redesigned the development licence program to help innovators get temporary access to spectrum,” he said, adding the department will have consultations to “get their feedback on what’s the best path forward.”

Because the technology is so new, Stewart said Deloitte predicts that very few people will buy a 5G enabled phone.

“Around the world in every country, coverage will be patchy, it may not work in other countries,” he said.

He added that the one million handsets that are projected to sell will mainly include people from the U.S., China and the U.K.

“So whether or not Canada launches [5G] in ’19, or ’20, it doesn’t affect that number even slightly,” he said. “It’s a big planet, there are all kinds of people launching and all kinds of people not launching [phones].”

He said that Canada, and many other countries, are deciding “they don’t need to go first.”

“Let someone else go first and blaze the path and we will follow,” Stewart said. “There is nothing wrong in letting everybody else figure out what best practices are and then adopting those practices.”

As of now, Chinese smartphone maker OnePlus is the only manufacturer to announce plans of a 5G-enabled phone. OnePlus says it will feature both Qualcomm’s recently announced Snapdragon 855 and 5G connectivity and plans to keep the phone priced at under $1,000 USD. This phone is expected to launch before the second half of 2019 begins.

Samsung is reportedly launching a premium Galaxy S10 with 5G only capabilities in the U.S. and South Korea in late 2019 or early 2020.

And according to another report, LG plans on launching its 5G phone at the Mobile World Congress next year in February. Sprint, the U.S. telecom provider, said it was planning on bringing this device to the U.S.

Correction 19/12/2018 4:06 pm: The following quote was corrected by changing the word situation to suasion. “Therefore our prediction already has built in the possibility that there could be various kinds of countries restricting, preventing, and exercising moral situation on their allies.”

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