5G RAN Vendor Choice Vexes Telenor, Contradictions Ensue

Telenor is walking back reports that it will completely ditch Huawei as it advances its 5G network deployment in Norway. The global operator, which is majority owned by the Norwegian government and has networks in Scandinavia and Asia, selected Ericsson to build its 5G radio access network (RAN) in Norway. Telenor is walking back reports that it will completely ditch Huawei as it advances its 5G network deployment in Norway. The global operator, which is majority owned by the Norwegian government and has networks in Scandinavia and Asia, selected Ericsson to build its 5G radio access network (RAN) in Norway. The company has been working with Huawei for about a decade on 4G in Norway, and its future plans with the Chinese vendor are somewhat contradictory and difficult to parse. Telenor said it plans to phase out much of Huawei’s equipment during the next four to five years, but the vendor will also play a role in upgrading some of its RAN to 5G in “selected areas.” Amid some confusion about its 5G RAN vendor plans, a Telenor executive told Reuters that while Ericsson was selected as a new vendor for 5G RAN, the operator will also continue to work with Huawei to maintain its 5G network and add 5G coverage in some areas of Norway. “Current 5G networks are underpinned by the existing 4G networks and inter-working one vendor’s 5G network with another vendor’s 4G network is nigh impossible,” Chris Nicoll, principal analyst at ACG Research, wrote in response to questions. This makes it difficult for operators to switch RAN vendors. Operators that want to rapidly deploy 5G and already provide 4G service on Huawei equipment are almost required to remain with Huawei for 5G, Nicoll explained. “If you look at other vendors, Nokia for example is having great success converting its 4G customer base to 5G. That is where we are with 5G today,” he said. Any operator’s decision to switch from Huawei to another vendor is notable because U.S. government officials have been openly battling the Chinese company over charges of espionage, national security concerns, and close ties to China’s military and government, among other allegations. Huawei has repeatedly denied those claims. The U.S. government’s campaign has widened beyond the U.S. border, and it has been pressuring western allies to ditch the Chinese company altogether. That campaign has been met with relatively muted reactions. The German government recently declined to ban Huawei or any vendors from participating in the design and buildout of 5G mobile networks. Following that decision, Germany’s three largest network operators — Telefónica, Vodafone Germany, and Deutsche Telekom — all announced plans to use at least some of Huawei’s technology in their 5G networks. Operators are also trying to separate the political brouhaha, which could be short lived, from the technical implications that could have long-term impacts on network performance. “The vendors are not all equal when it comes to 5G technology,” Nicoll said. Organizations that have done early 5G testing, proof of concepts, and implementations routinely say that “Huawei is about a year ahead on 5G tech,” he said. “I think that may have narrowed a bit, but the vendors have always had differences in performance in their radio solutions. Given that up to 80% of the cost and expense of a network is the RAN, even fairly small differences in power or performance efficiency can make a competitive difference for an operator.” In a prepared statement, Telenor Group CEO Sigve Brekke said the operator evaluated all of the vendors’ technical qualities, ability to innovate, commercial terms and conditions, and conducted an “extensive security evaluation” before choosing Ericsson as a new RAN vendor for its 5G network. By putting its network improvement project on a for- to five-year timeline, Telenor also appears to be buying itself more time before making a final decision about the extent of its business with Huawei. “Changes in the political landscape these days can happen very rapidly,” and a trade agreement between China and the United States could relax the measures that have been taken against Huawei, Nicoll explained. “Politically it must be a surreal time for operators around the world to have to wake up and see what is happening that day in the political sphere regarding Huawei and the Chinese suppliers,” he said. “[Operators] are used to dealing with the political aspects of spectrum and mobile services but this is new territory for them.” Telenor also appears to be trying to split the difference by noting that Huawei will play no role in its 5G mobile network core. Nokia and Ericsson were previously announced as Telenor’s vendors for the 5G core. Nicoll doesn’t make much of that distinction though, insofar as it relates to U.S. government concerns. “This is an issue regarding China as a supplier. Period,” he said, adding that there is no distinction between the RAN, switching, or core from that perspective. “The European operators trying to separate the two is to me an attempt to walk the fine line between getting their 5G networks deployed, while their respective governments deal with the global trade issue.” Telenor says it will begin offering 5G services to its customers in 2020.