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Exploring the 5G Saga

Why in the news?

1. The recent embargo on the Chinese telecom giant Huawei by the US and its allies is indicative of such technological disintegration.

2. China’s 5G network density rate of 14.1 sites per 10,000 people, in comparison to 4.7 sites per 10,000 people in the US is a matter of concern for its competitors.

3. The US's ban on Huawei seems to be a strategy of market competition or state control of digital spaces.

What is the present economic scenario between US and China?

1. After 4 decades of economic integration, the United States (US) and China, under their current political regimes have reached a tipping point of economic tensions where both countries remain non-committal towards any kind of forbearance.

2. Political leaders from both countries are advocating for disintegration across all four baskets of goods, capital, people and technology.

3. The disintegration of goods comes undue on the global supply chains, particularly the development of sensitive technologies.

4. The integration of cross-border capital flows is threatened by restrictions on Chinese investments taking hold across big sectors of the US economy.

5. The integration of people especially young Chinese students can be stalled by the US’s potential policy of barring them from a gamut of science and engineering courses in the US.

How did Huawei gain prominence?

1. Huawei has emerged as one of the leading global suppliers of high-tech network building kits for mobile phones since the late 1990s, along with Nokia and Ericsson.

2. The firm is noted for its proactivity in setting the technical standards for the “fifth generation” (5G) network.

3. China alone is projected to deploy almost 33% of all 5G connections world- wide, by 2025 mainly because of Huawei.

4. In contrast, the share of the US and Western Europe, taken together, is estimated to be around 25%.

5. China filed 53,345 technology patents, in which Huawei alone contributed for 10%, which are at the heart of those technologies that the governments worldwide have recognized as critical for the future of national infrastructure.

6. According to Deloitte, between 2015 and 2018, China has not only outnumbered the US cell sites by at least 12 times but also outspent it by $24 billion in 5G infrastructure.

Which are the advantages and disadvantages of 5G?

1. 5G is the spectrum more efficient than the predecessor technologies.

2. It can transmit higher amounts of data across larger numbers of communicative devices at lower propagation latencies.

3. 5G will generate new revenue streams through diversification of cyber products and services.

4. Deployment of 5G during the initial/nascent phase of the technology appears to be highly capital intensive.

5. Frugality of network investments remain uncertain.

6. With these trends emanating, the integration of the global innovation ecosystem seems to be at risk due to mutual efforts of the US and China to exclude each other.