A visitor walks past a 5G sign during Mobile World Congress in Barcelona, Spain. Picture: REUTERS
A visitor walks past a 5G sign during Mobile World Congress in Barcelona, Spain. Picture: REUTERS

Chinese technology giant Huawei has reassured SA telecoms operators that it will not leave them in the lurch, even as trade tensions between Washington and Beijing escalate. 

"We will not leave any of our South African telco customers vulnerable in any way,” said Huawei SA CEO Spawn Fan.

"Our aim is connect every South African wherever they may live. … We have been in the country for 20 years now and we have worked with dedication and focus to support the needs of our telco partners," Fan said.

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But Ruhan du Plessis, technology analyst at Avior Capital, said local operators may need to reduce their reliance on Huawei as a network equipment supplier to mitigate future potential supply chain shocks as the trade-war continues to develop. 

“Operators will have to get around who they’re going to partner with going forward. Huawei tends to be a cheaper vendor that provides fantastic quality," he said. 

He said Cell C and Telkom likely have more relative exposure to Huawei than MTN and Vodacom.

Willem Roos, CEO of data only mobile network Rain SA, said "We utilise Nokia and Huawei as key suppliers in this endeavour, and we value both parties highly.  We do not foresee changing our procurement practice at this stage."

Huawei has been working for some time now to mitigate the effect of the US ban on its global operations, including SA, the company said.

Huawei also said it works closely with the Independent Communication Authority of SA and department of telecommunications & postal services. 

“The real interesting thing is who does SA side with," said Du Plessis. 

The telcos will likely meet with the government to understand what their position on US-China relations is before any of them make a big decision on what they will do with their networks, he said. 

The Shenzhen-based company is confident that it is well ahead of its rivals to build and implement the fifth generation of mobile internet access technologies known as 5G.

Eric Zhao Zhipeng, chief marketing officer of 5G for Huawei’s carrier business told Business Day in Shenzhen: “Huawei has already won 42 5G contracts.”

More than half of these contracts are in Europe, with the rest being in the Middle East, South America and Asia Pacific regions. 

“We’ve already shipped more than 100, 000 5G base stations,” he said. 

SA operators have already begun to invest for a 5G future.

Sipho Maseko, group CEO for leading South African fibre provider Telkom said: “Our investment in fibre makes a lot more sense because the day we have 5G, we would have already pre-invested in infrastructure that will carry that traffic.”

“As a world leader in 5G technology, Huawei is a valued partner to Rain and we continue to work closely with them to build our 5G network,” said Roos. 

By the end of 2018, Huawei said it will have invested at least $600m (R8,9bn) in 5G research and development. 

“5G is on. The equipment, the handsets, the business, the use cases are ready,” said Zhipeng.

He said 5G would help much of the data-consuming public as it offers the lowest cost of data compared with 2G, 3G and 4G.

The SA market already has a number of 5G enabled sites but mainstream adoption seems to still be some way away. The issue of licensing spectrum is perhaps the biggest bottle neck for mainstream adoption. 

5G adoption depends on the  issuing of 5G spectrum, the maturity of network infrastructure, affordable 5G handsets, maturity of the local ecosystem, said Huawei. 

Spectrum is also an issue in China, Zhipeng said. China Mobile, China Telecom, China Unicom are all doing network tests in preparation for 5G. 

When all the Chinese operators switch on 5G, there will be a large subscriber base which could help with global adoption and bring down the price of 5G enabled phones, said Zhipeng.

Rain plans to launch a large-scale commercial 5G network during the last quarter of 2019 providing initial coverage in Johannesburg, Tshwane and Cape Town, Roos said. 

gavazam@businesslive.co.za

The writer was hosted by Huawei in Shenzhen