Following a 2019 telecoms supply chain review and the decision in July 2020 to remove Huawei from its 5G network, the UK government released its 5G Supply Chain Diversification Strategy (SCDS) in November 2020. These policies mark a historic shift in UK telecommunications policy. The key message is that the government will proactively intervene in the telecoms industry to tackle supplier lock-in and incumbent advantages that limit competition.
Its long-term vision includes the disaggregation of network supply chains, open interfaces that promote interoperability, a global supply chain for components, transparent and independent standards, and the prioritization of network security and resilience.
The UK has also committed to working with international partners to ensure there are concerted global efforts to grow and open up the global 5G market under the principles of openness, competition and diversity.
As a first concrete step under the SCDS, the UK government selected Japanese supplier NEC as the partner for its first trial of the new Open Radio Access Networks (Open RAN) technology. Open RAN enables the participation of multiple suppliers by ensuring interoperability, a lack of which has typically prevented entry by new suppliers in pre-existing 5G networks. The UK government has also been working directly with its Japanese counterpart to make possible the deployment of this new technology.
A well-suited partnership
Although Open RAN is seen as a game changer for 5G supply chain diversification, there are critical challenges ahead for this new technology. First, there needs to be confidence in its security and reliability, to the same extent as with conventional systems. Second, its cost must be competitive to avoid penalizing end-users. Third, it must attract a new and wide range of suppliers.
There are several reasons why the UK and Japan could be a well-suited partnership to combat these challenges.
Open RAN-based 5G networks have already been deployed at scale for commercial operations in Japan, thanks to concerted efforts by mobile operators, suppliers (such as NEC and Fujitsu) and the government. For example, the Japanese government has offered tax incentives for investment in 5G networks that meet the required standards in areas such as trustworthiness/security, stability of supply and openness. It has also provided a testing environment through its development of testing techniques as verification tools for multi-vendor interoperability, which helps save time and reduce costs. In November 2020, NEC opened an Open RAN Centre of Excellence (CoE) in the UK, which will provide engineering support for its global business. It is also in the process of building a multi-vendor interoperability testing facility as part of the centre that will contribute to enriching the Open RAN ecosystem.
UK-Japan cooperation in this field builds on wide-ranging bilateral cooperation in recent years. The UK-Japan Comprehensive Economic Partnership Agreement, the UK’s first post-Brexit trade deal, includes provisions for the free flow of data. The two countries have also increased their defence and security cooperation in the Indo-Pacific region. The UK-Japan foreign and defence ministerial meeting – ‘2+2’ – in February 2021 agreed strengthened cooperation not only on defence but also on the Sustainable Development Goals (SDGs), promotion of quality infrastructure and cyber security. The UK and Japan’s shared values are critical for joint action on future telecoms network diversification but are also important beyond that, as the design of digital technology for 5G and beyond will impact how our future social systems look in terms of privacy, openness and data governance.
Implications for the future of global digital cooperation
The statement that followed the ‘2+2’ meeting confirmed the two countries’ commitment to ‘working together towards a more diverse, transparent, open, secure and interoperable 5G network architecture in order to strengthen cyber security, including supporting industry initiatives promoting open architecture and through multilateral fora such as the G7’.
The UK’s G7 presidency, and June 2021 summit, will provide an opportunity to further promote its cooperation with Japan on Open RAN. The aim will be to map out what future global collective action on telecoms supply chain diversification might look like.
The UK’s presidency could prove to be a tipping point for the global dissemination of Open RAN, particularly through the digital and technology ministers’ meeting which will prioritize telecoms diversification. If just a limited number of nations agree to engage in collective action on the advancement of alternative 5G technology, it will help change the trajectory of future 5G network deployment. As Open RAN unlocks market barriers to new entry, an expanded market with a wave of new suppliers would eventually benefit the global community as a whole, as diversification would ensure the security and resilience of the telecoms network and economies of scale would reduce costs.
However, even among the ‘D-10’ or ‘Democratic 10’ countries (G7 + Australia, India and South Korea) who will participate at the G7 summit, it may not be easy to obtain consensus on Open RAN amid diverse views on the required standards of security and resilience, and the role of government in the telecoms industry.
But there are some promising signs. In Europe, Open RAN is increasingly seen as a realistic option and, since last year, there have been a growing number of trials to secure a high standard of security and resilience across the industry. Alongside its partnership with the UK, NEC will also engage in other trials across Europe, including with Vodafone Ziggo in the Netherlands and Telefonica O2 in Germany. Global collective efforts are gradually taking shape not only between governments but also in the private sector.
The task of 5G supply chain diversification is simple, despite the practical difficulties of coordination. The UK’s clear long-term diversification strategy coupled with persuasive evidence of Open RAN’s technical feasibility in Japan, makes their partnership well suited to help promote a new form of global cooperation on the 5G agenda. Their work and progress in this area will matter far beyond 5G and will also help shape the future of global digital cooperation.
Hiroki Sekine, Visiting Fellow, Asia-Pacific Programme.