The global communications industry is in turmoil as President Donald Trump cripples Huawei as part of his trade war with China. Along with Ericsson and Nokia, Huawei is one of only three major 5G network equipment suppliers.

Trump has started a series of trade spats with countries who spend less on US goods and services than the US spends on theirs; they include Canada, Mexico, China, and the countries in the European Union. He escalated the disagreement with China into a full trade war. He declared a national emergency, and began targeting Huawei specifically, accusing the company of being a security threat.

The threat, as near as can be determined, is theoretical; the US and some allies fear the Chinese government could force Huawei to allow it to spy on networks in which Huawei equipment is installed. The fear is not unfounded; China has expertise in state-level hacking, and the US has compelled US manufacturers to install so-called “backdoors” allowing US spy agencies to tap networks.

Britain has made no final decision yet, but the assessment that seems to be prevailing is that it might be risky to use Huawei equipment in the network core, but it should be safe to use Huawei edge systems. Meanwhile, the administration is threatening Germany for continuing to consider using Huawei gear; Secretary of State Mike Pompeo told Germany that if it did not ban Huawei, the US would cease sharing intelligence.

Google will no longer license the Android operating system (OS) to Huawei, which means the latter won’t be able to host several of the world’s most popular smartphone applications. Arm Holdings, which provides critical intellectual property (IP) for handsets, and Qualcomm, which provides crucial chipsets for leading edge smartphones, have both said they will cut off Huawei.

Huawei is scrambling to find alternate suppliers of IP and components (foundry TSMC has pledged to keep supplying the company), and is redoubling work on a home-grown OS, which is reported to have the codename Hongmeng (signifying the beginning of a new era). Huawei recently applied for a European Union trademark for an OS called Ark.

China has a self-image of a country that gets bullied. Chinese consumers are turning away from US products; a notable example is that sales of Apple iPhones dropped by 30 percent in the last quarter. The Chinese government had been consistently reiterating its willing participation in trade negotiations. Now, with Trump continuing to escalate his trade war, China President Xi Jinping is digging in his heels; he recently likened China’s resistance to Trump’s trade hostilities to a new “Long March,” a reference that signifies a great deal: dogged defiance and a will to endure great deprivation in the short term in order to prevail in the long term.

Domestic cover
That the 5G industry is collateral damage in Trump’s numerous trade arguments oddly provides cover for communications services providers.

The US is somewhat buffered from the turmoil because Huawei has been almost completely frozen out of the US market anyway. The trade war is grabbing the headlines which otherwise might be dedicated to the attenuated pace of the rollout of 5G telephony that AT&T and Verizon originally led the world to believe was going to happen last year.

Of course, almost none of the equipment – core network systems, edge systems, or handsets – was ready last year. Today, AT&T, Verizon, and T-Mobile have wireless network infrastructure up and running in parts of a few dozen cities. Motorola has had clunky 4G handsets with 5G modules for some months. Right now, full 5G handsets are coming available from Motorola, Samsung, and LG.

The Samsung Galaxy S10 5G is one of the first 5G smartphones. In the US, it works only with Verizon’s network. It retails for $1,299.99.

Demonstrations of the technology so far have been mixed, marred by fitful reception and equipment glitches, but when the stars align and everything works the way it’s supposed to, 5G works as well as advertised. Everyone involved, from equipment suppliers to the service providers themselves, express confidence that 5G technology works.

But it’s not going to make anyone much money in the short term. While a great many consumers will always want the latest technology regardless of whether they need it, few people – if any – need gigabits per second when they can get hundreds of megabits per second with 4G connectivity. US consumers are growing less likely to upgrade their 4G handsets simply because a new model is available; there’s a growing expectation consumers won’t automatically upgrade to 5G simply because 5G is available. That 5G service typically costs more might contribute to the reluctance to upgrade simply to do it.

Each time the short-term outlook for 5G telephony gets a bit dimmer, service provider plans get modified. Verizon seems to be preparing its wireless telephony customers for spottier 5G coverage than they got with 4G, while AT&T pushed its schedule back yet again.

AT&T scales down expectations
Prior to last year, AT&T vowed to have broad 5G coverage this year. When that failed to pan out, the company revised that to early next year. AT&T just moved the target back again, to late 2020 and early 2021.

During AT&T’s first quarter conference call with financial analysts, CEO Randall Stephenson said AT&T would have 5G coverage nationwide next year.

“We have, if you will, a couple hundred million on our 5G Evolution network coverage by the end of this year, but end of next year we will have over 200 million of our POPS (points of presence) covered on a 5G network. So our plans for 5G are going quite well. We – as we mentioned earlier – don’t expect that revenue to come until next year and the year after, but we are working on a number of things,” Stephenson said.

5G Evolution is what AT&T calls advanced 4G. The “number of things” AT&T is working on include installing 5G connectivity for medical centers, factories, and large enterprise campuses, Stephenson said.

Both AT&T and Verizon are engaged in fiber buildouts. Both have provided any number of reasons for installing more fiber, but one of them is that wireless has always needed wireline support for backhaul, and that need is only going to grow more acute as wireless traffic inexorably grows. Because millimeter wave (mmWave) signals don’t travel as far, 5G cells will have to be closer to customers, and the fiber is going to have to follow them there.

There is some irony involved in that, given both had backed away from extending fiber with their respective wireline TV services. AT&T’s U-verse was based on a fiber-to-the-node (FTTN) approach, and Verizon’s FiOS was fiber-to-the-home (FTTH). Both decided laying any more fiber was too expensive. AT&T even bought a direct broadcast satellite company to avoid installing more fiber; DirecTV cost the company over $48 billion.

[Continue reading on EDN US: Verizon and its DSS hedge]

Brian Santo is editor-in-chief at EE Times. He has been writing about science and technology for over 30 years, covering cable networks, broadband, wireless, the Internet of things, T&M, semiconductors, consumer electronics, and more.