The misplaced nationalism in telecommunications

By William Webb

Over the last decade we have seen increasing nationalism in telecoms. Initially this manifested itself as a desire to avoid certain “high risk” suppliers, predominantly Chinese companies. This was said to be due to security concerns with their products, but geo-politics is clearly also playing a part, with a desire in the West to reduce reliance on China. Following from this, some countries have tried to strengthen their national capabilities to develop and supply telecommunications equipment, partly to increase the number of suppliers and so inject more competition into the supply chain, and partly because of a concern that national telecoms networks might not be able to maintain full service in certain future scenarios without local capabilities.

Currently there are two major cellular equipment suppliers open to western operators (Ericsson and Nokia) and a few more minor players (Samsung, NEC). Most countries have multiple national mobile operators, although these may be owned by multi-national companies such as Telefonica and Vodafone. There are multiple satellite providers, but only one that provides widely available home broadband (Starlink) and only a few credible operators of networks that might provide direct-to-device services (Starlink, Iridium, perhaps OneWeb) although others may emerge.

Efforts to strengthen national capabilities have included:

1. Promoting open-RAN (O-RAN) equipment, providing grants or similar to O-RAN suppliers and pressuring national operators to increase the percentage of O-RAN equipment in their networks. The thinking behind this is that it is easier for new entrant suppliers to provide elements of O-RAN solutions than complete mobile networks and hence a vibrant O-RAN market might generate new suppliers, hopefully from within the country.

2. Funding 5G and now 6G research in the hope that this might lead to important new technologies that could be patented, giving local companies a key role in future mobile generations.

3. National support for satellite networks in the largest of countries or regions such as China and the EU.

These efforts have had very little effect. O-RAN has not proven successful, with most networks only having a small percentage of O-RAN equipment. New entrant suppliers such as Mavenir and Parallel Wireless have emerged, but have struggled and are nearly all US-based companies. 5G funding has not resulted in new national champions and, while early in the process, 6G funding is so far showing no signs of achieving anything significant. Indeed, such funding seems more likely to strengthen the incumbent suppliers.

This lack of success should not be surprising. Equipment and network supply is mostly delivered into open marketplaces with global economies of scale and attempts by governments to influence global markets rarely succeed. There are good economic reasons why there are few suppliers, and even if new entrants came about, there would likely just be supplier consolidation, as has occurred often in the past. Indeed, at the time of writing, there were rumours that Nokia’s mobile network division might be sold to Samsung. Only the very largest countries, such as China, have any realistic chance of changing outcomes.

Nationalism could be harmful. Aside from the wasted money spent on subsidising failing companies or pointless research, governments tend to look to the most innovative and far-sighted concepts as a way to potentially grow national strengths (since near-term improvements tend to favour incumbents). This means funding and promoting the most extreme visions, such as holographic communications. This in turn prompts standards bodies towards solutions that are not aligned with current user needs. This clearly happened in 5G, where the hype was extreme and the foreseen applications very futuristic and seems to be occurring in 6G.

In practice, countries have little to fear. Ericsson and Nokia reside in “safe” countries and networks will not fail if there are temporary pauses in equipment supply. National operators are, broadly national. Satellite network supply may be less certain – as has been seen with Starlink policies there can change on the whim of its CEO – but most countries have very little reliance on satellite for communications and can reduce this further with solutions such as high-altitude platforms.

National pride and a concern that national networks be highly resilient are fully understandable. But aiming to build national telecoms supply capabilities is not appropriate. Better that we all work together, as far as possible, to continue the hugely successful approach to global telecoms.

About The Author 

William is an independent consultant providing advice and support across telecommunications matters. He was one of the founding directors of Neul and became CEO of the Weightless SIG. Prior to this William was a Director at Ofcom. He was IET President 2014-2015, has published 19 books, has multiple honorary doctorates and awards.