Today’s announcement by the UK government on Huawei in the UK network is significant for the future of 5G in UK. Huawei equipment will now have to be removed from the UK by 2027, and no more can be purchased beyond the end of this year . Even in this form this may only be a staging post to even stricter Huawei removal measures. The UK seems to be bowing to the inevitable pressure to take a side in the US/China trade dispute.
We will leave to one side the arguments on whether this is the right thing to do?
This will have profound consequences for the direction of 5G in the UK. In our previous blog Huawei in the UK – 5G technical hype becomes political hype, we looked at the reality about 5G roll out today. 5G today is primarily about 4G mobile broadband augmentation and its business case relies on existing 4G/3G infrastructure being upgraded not replaced. BT and Vodafone UK will no longer be able to simply upgrade 50% of their mobile networks. These providers will, for the foreseeable future, just have to focus on infrastructure swap out. It seems unlikely in this environment that much will be done by CSPs to develop the new, and as yet unproved, 5G services and public edge cloud.
CSPs already only paying lip service to the possible 5G markets beyond enhanced broadband.
It is possible to argue that CSPs in UK, and elsewhere, were already only paying lip service to the possible 5G markets beyond enhanced broadband. So possibly the UK restrictions merely expose this reality. However, with all the effort going into replacing network hardware, the web scale players have the opportunity to consolidate their existing dominant cloud position and own the edge. Vodafone has recently announced that it is partnering with AWS to develop the edge cloud. With webscale players making the edge compute infrastructure investment, the CSPs increasingly will become edge cloud landlords; a good business but not a rapidly growing one. CSPs will retain their existing network connectivity business, but shorn of its edge ownership it will remain a commoditized business.
The Huawei decision may simply have exposed that CSPs are utility providers of connectivity.