Race to 5G

Aside from trade, technology is playing a role in shifting the global economy’s center of gravity towards the East. After Japan and South Korea, the big tech from China is posing a serious challenge to the Western tech giants. Now the race to develop 5G network technology – which is otherwise a logical graduation up on the wireless ladder connecting people and machines – is stoking economic tension on an unprecedented scale.

Before analyzing Pakistan’s readiness for the connectivity upgrade, the geopolitics surrounding an inherently technical issue – of developing technology, standards and policy for future 5G networks – needs to be understood. Because that tug of war between mainly US and China will affect deployment decisions here.

Some background first! Previously, the tech hardware and software space was dominated by American, European and South Korean tech giants. It was understood that their companies, operating under rules of law enforced by liberal democracies, wouldn’t spy en masse on the people, businesses and governments using their telecom networks. Except for a few inter-governmental spying incidents on part of the US government, the system worked largely well.

Rise of Chinese tech threatens the West’s comfort level with ubiquitous tech-based lifestyles and modes of communications. There is fear in the US that that the Chinese state, using its tech giants’ backdoors, might spy on Western interests from economy to security. That concern is shared by some, not all US allies – but the Western bloc in general has been cognizant of that issue.

Thanks to forward guidance and massive R&D spending, Chinese tech giants, mainly Huawei, have raced ahead in the development of 5G hardware equipment. In practical terms, it means Huawei’s 5G hardware and related operating software will not only be avant-garde and efficient but also cheaper compared to Western alternatives.

In a free market, which the West aspires to uphold, it will be hard to deny businesses and consumers the fruits of Chinese scale. The US government, wary of Huawei breaking through, has tried to thwart its ambitions through economic, national security and diplomatic measures. It suffered a setback last month as the British government allowed Huawei to build some of its 5G network under a limited engagement. Now the delays in agreeing to common 5G network standards are slowing down Huawei’s deployments.

As for 5G entry into Pakistan, both the demand-side and supply-side need to first exhaust the existing 3G and 4G networks’ prospects before a leap for 5G could make commercial sense. Properly-deployed 4G network is good enough for IT-led businesses that rely on Internet the most. For those reasons, experts put question marks over “use case” of 5G in Pakistan until 2025. 5G is said to be better suited for dense areas and for real-time applications reliant on remote connectivity (e.g. driverless cars, virtual reality).

Still, it is a good time to start removing limitations like inadequate availability of spectrum and fiber-optic connectivity that are currently constraining even 3G deployments. As for Huawei 5G footprint in Pakistan, it is likely that any privacy concerns may eventually be overlooked, for a number of reasons, not least the Pak-China friendship. Huawei already vends a significant amount of telecom hardware in Pakistan. It continues to work with the government on electronic surveillance under the hood of safe-city projects. And lastly, Huawei’s tech can leapfrog Pakistan into 5G era cheaper and faster than other alternatives.