US tech firms to remain involved with Huawei on 5G and other standards

Major US companies will remain engaged in developing a global 5G mobile standard, as Washington seeks to keep them in the same room as Huawei Technologies, which is already ahead in drawing up the specifications.

The US Commerce Department and other agencies signed off on a rule change on Monday that ensures Huawei’s inclusion in a US trade blacklist will not prevent American companies from international 5G standards-development activities.

Also read: China is using Huawei to drive a wedge in the UK-US special relationship: Senator

“This is not a friendly gesture by the US, but simply a reflection on its part that it is too late and too expensive for any country to develop its own 5G standard,” Jefferies equity analyst Edison Lee said on Tuesday.

A Huawei spokeswoman declined to comment on the US decision.

Lee said feedback from US tech companies likely convinced the Trump administration that it is not realistic for the US to create its own version of 5G. Large US firms, including Intel Corp and Qualcomm, have already contributed plenty to 5G standards under the 3rd Generation Partnership Project (3GPP), an international collaboration of seven telecoms standard development organisations that draw up complete mobile system specifications.

The stakes are high for US companies to remain in these standards discussions because 3GPP is now at work on introducing Release 16 of the next-generation mobile technology’s global standard. This involves support for new applications such as autonomous driving, smart factories and remote surgeries in the health care sector – among a range of innovations that are expected to help fuel economic growth for countries over the next decade.

“The US has more to lose if their companies are cut off from further participation in that process,” Jefferies’ Lee said. “Huawei has leading patent shares in 5G, which could rise further if US companies stop contributing.”

China’s road to 5G has been filled with difficulties. In 2012, two years before China Mobile launched 4G services on the mainland, various Chinese entities joined an international initiative to research and develop 5G.

The world’s second largest economy is now estimated to account for 35 per cent of 5G standard-essential patent declarations, about 15 per cent of which come from Shenzhen-based Huawei, according to Lee, citing data from German research firm IPlytics. By comparison, US companies’ share is estimated at roughly 13 per cent, he said.