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ft.com/content/8d7010… I have posted comments to today's @FT story on the new revelations regarding Huawei/Chinese 5G in the U.K. For those that may not have an FT subscription, I'm going to post my comment in this thread:
As can be seen in recent media reports and in the final paragraph of this article, Huawei's leading advocates are the retail mobile carrier lobby. The reason is simple, the retail carriers like the subsidies via vendor financing and discounts that Beijing can deliver via Huawei.
As Beijing/Huawei is willing to subsidize the feudal one off spectrum auction model, the carriers want to keep it as it protects them from serious price competition (via more efficient use of the spectrum resource & price discovery on capacity as in electricity markets).
The carriers are rent seekers seeking to recover their one off auction fees & extract a rent from mobile wireless consumers using the cheapest means of delivery possible. It's about maintaining the margin between the cost of producing a gigabyte & what it retails for.
The big production input costs are one off spectrum auction fees, the network equipment that turns spectrum into deliverable gigabytes and the cost of financing both (auction fee & network equipment). Rather than go through the transformation of allowing average price to drop to
whatever the free market demand for a gigabyte/capacity is & see connected device demand soar unpredictably (because as the average price of a gigabyte drops, demand/variety of uses rise), the retail carriers want to keep the status quo retail mobile oligopoly.
It may not be perfect for them but it's low risk & that's what their management teams are incentivised to do. Keep the risk low & innovation to the minimum necessary to keep collecting the rent. In return for propping up this zombie rent seeking business model, China extends its
digital belt & road dominance in the 5G/Cyber domain. In every country that allowed them, these labs were a sop to governments & regulators done as part of the deal to get Chinese kit in the door. Labs, donations to leading charities (in the U.K. the Prince's Trust) and
Universities have all been part of the cookie cutter package. That the labs are now exposing such flaws shouldn't be surprise, question is at this point, what do they do about it?
