Has Huawei been snubbed in Singapore’s 5G race? Not exactly.

The IMDA has cleared Singapore’s operators for 5G deployments, and the suppliers have been chosen. Huawei is not one of them – at least not yet. Here’s why.

Photo by Lily Banse

Singapore’s mobile operators have been officially cleared by the Infocomm Media Development Authority (IMDA) to offer 5G services. The vendors partners have been named – and Huawei is not one of them. However, while the omission is glaring in the broader context of the geopolitical wrangling Huawei has found itself caught in, it doesn’t mean Huawei is out of the running in Singapore’s 5G race – at least not yet.

Last Thursday, the IMDA issued the final 5G awards to Singtel and the Joint-Venture Consortium (JVCo) formed by StarHub and M1after they completed the required regulatory processes, including the selection of their preferred frequency spectrum lots, vendor partners and “other technical and legal matters”.

S Iswaran, Minister for Communications and Information, said in a statement the final awards put Singapore “on track for nationwide 5G standalone deployment by 2025.”

Both Singtel and JVCo will be assigned 100MHz of 3.5 GHz spectrum each, while Singtel, StarHub and M1 will also be assigned 800 MHz of mmWave spectrum each, all of which can be used for 5G. They will also be able to use mmWave spectrum to densify their 5G networks with localized high-capacity 5G coverage. StarHub and M1 will lease capacity from JVCo to offer retail 5G services.

TPG Telecom will be allocated the remaining mmWave spectrum to roll out its own 5G hotspots. It will also be able to lease 5G capacity from Singtel and JVCo under a, MNVO arrangement (as will other MVNOs in Singapore).

Each of the operators announced their official vendor partners for their 5G rollouts, with Ericsson and Nokia emerging as the big contract winners for the Singtel and JVCo networks, respectively.

The absence of Huawei raised eyebrows, given that the Chinese vendor is under fire from the US government over alleged cybersecurity issues. In addition to the US, a number of countries have banned Huawei from 5G projects, including Canada and Australia.

To be clear, Singapore has not issued such a ban. In fact, TPG Telecom has contracted Huawei for its mmWave RANs, while StarHub, and M1 have said in separate statements that Huawei is still in the running for other 5G-related projects.

StarHub said that while Nokia is its preferred supplier for its 5G core and mmWave networks (“subject to final contract”), it is also “exploring other network elements with vendors including Nokia, Huawei, and ZTE.” M1 said it had selected Nokia to supply 3.5-GHz 5G standalone (SA) RANs as well as 5G core equipment, but would also be “looking to work with multiple network vendors which will include Ericsson, Nokia and Huawei, based on specific use case requirements. Singtel said it has selected Ericsson to provide the 5G SA core, RAN and mmWave network, but that the terms of the contract had not yet been finalized.

That said, the IMDA’s 5G Call for Proposal (CFP) process required prospective 5G players to ensure their vendor partners comply with requirements related to resilience, cybersecurity and vendor diversity, among other things. In that sense, the decision by Singtel, StarHub and M1 to select Nokia and Ericsson over Huawei could be read as unspoken caution – not necessarily because they think Huawei poses a security problem, but because many experts believe that Huawei’s future as a 5G equipment vendor is not at all certain right now.

Export blues

The US government – which considers Huawei’s dominance in the 5G market to be a threat to US national security – has been leveraging its rules on export controls to limit Huawei’s ability to play in the 5G space. Last year, the US Commerce Department placed Huawei on its “entity list”, which ostensibly bars Huawei from buying US technology if “the sale or transfer would harm US national security or foreign policy interests”. The idea was to hobble Huawei’s ability to acquire the chipsets it needs for its network equipment and smartphones, particularly for 5G.

However, after Huawei (and, to be fair, its US chipset partners) discovered exploitable loopholes to get around the restrictions, the Commerce Department closed those loopholes in May 2020 with new export rules that bans chipmakers worldwide from using US machines and software to design and manufacture semiconductors for Huawei.

The new rules pack a harder punch because the foundries that are advanced enough to serve Huawei’s chipset needs (particularly 7nm CMOS processes) all use US technology in some form or other – including Huawei’s own chipset subsidiary Hisilicon, as well as its chief chip supplier, Taiwan’s TSMC.

Analysts are divided as to whether the latest rules will put Huawei out of business for good, but all agree that Huawei will take a major hit in the short term. At the very least it puts Huawei at a disadvantage when competing for 5G contracts – Huawei might offer the best value for money, but Nokia and Ericsson don’t have a problem sourcing components for their equipment.

Ironically, one thing that works in Huawei’s favor is that the impact of the US rules are not limited to Huawei itself. Strategy Analytics says the US rules are likely to backfire in the long term because if Huawei goes down, it could take a lot of US companies down with it (as well as non-US players like TSMC) for the simple reason that Huawei is one of their biggest customers. The rules could also spell the beginning of the end of US semiconductor leadership, according to a report from Boston Consulting Group [PDF].

It could also impact development of 5G standards, because Huawei is a major patentholder in 5G technologies and participates in all the relevant standards bodies. The 3GPP and other standards bodies complained the US rules would prevent US and Chinese companies from working on the same standards, which could well result in a return to the fragmented standards wars of 2G and 3G, which would seriously impact the proliferation of 5G.

Which is why last month the Commerce Department amended the Huawei “entity listing” that makes an exception for technologies released to Huawei and its affiliates if it contributes “to the revision or development of a ‘standard’ in a ‘standards organization’.”

In that sense, the pending death of Huawei may be greatly exaggerated – at least in the long term. In the short term, however, it may be asking a lot for operators in Singapore and elsewhere to take a leap of faith to include Huawei in their 5G plans in these uncertain times.