A group of U.S. senators proposed a bill that would add $1 billion into the research and development of 5G related technology, in a bid to compete with Huawei. However, the proposed amount is a paltry sum, compared to what the telecom giant has already spent on the technology.
Pressure from the U.S government had prohibited major telecom carriers from utilizing Huawei equipment in U.S. networks.
Also, the FCC has prevented smaller carriers from making use of Huawei’s telecom equipment. Despite all these efforts, the telecom giant remains the biggest provider of telecom equipment in the world, followed by Ericsson (Sweden) and Nokia (Finland).
Bill highlighting Huawei’s imminent dominance
The proposed bill points out the continued growth and influence of Huawei’s technology in the 5G market. It is concerned that Chinese companies could dominate the 5G infrastructure, which would leave other carriers with less attractive options.
Co-sponsor of the bill, Senator Mark Warner, stated that Huawei is aiming to become the fastest, cheapest, and most dominant global provider of 5G. He says the company would achieve that if the U.S does not do something about it.
He reiterated that the U.S and other western markets would lose out big time if Huawei continues in this current pace in the supply of 5G infrastructure. As a result, other providers could fold up while their workers and partners lose out on jobs and market share.
Other co-sponsors of the bill include Richard Burr, Bob Menendez, as well as Marco Rubio.
The U.S. preventing Huawei from dominating the industry
In 2017, there was a proposal by the National Security Council to nationalize the 5G network in the United States. The proposal suggested the leasing of wireless infrastructure to private carriers.
According to the proposal, the U.S will buy 5G equipment from U.S companies and other trusted providers to make non-Chinese telecom infrastructure competitive in the market. However, the proposal never saw the light of the day due to so many criticisms about its implementation.
But the U.S. government blocked the proposed acquisition of US chipmaker Qualcomm by Huawei, citing that if it allows the acquisition, Qualcomm will become less competitive globally.
Yesterday’s bill was also aimed at preventing Huawei from gaining complete control of the 5G market.
However, it does not address the need for the U.S. government to create its network. Instead, the bill is proposing a grant of $750 million to help subsidize the cost of research and development in 5G technology.
It also proposes an additional expense of $500 million for the development of a trusted and secure telecommunications technology. According to the proposal, the funding for the project would be derived from auctions set up by the FCC.
Grant far below Huawei investment in 5G
The proposed grant is not close to what Huawei has spent on 5G technology. Bloomberg reported that the Singapore-based company pumped in $15.3 billion in 2018 alone. Huawei is the biggest spender among other companies, who have also spent a substantial amount on research and development.
In 2018, Ericsson spent $4.8 billion, Nokia spent $5.46 billion, Qualcomm spent $5.48 billion, while Cisco spent $6.37 billion. And the research that could introduce 6 generation network is already underway.
Although the bill did not particularly say its main target was to compete with Huawei, the sponsors of the bill had the company in mind.
What do you think about the new proposed bill of $1 billion against Huawei 5G technology? Feel free to comment below.
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