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To: Eric L who wrote (21)3/10/2020 1:55:49 PM
From: Eric L  Respond to of 47
5G Technology Leadership: Huawei and Others (Part 2 of 2) ...

... [continued from prior post "Huawei's '18-month lead' in 5G is telecom's most spurious claim."]

Country rankings make a mockery of the Huawei leadership claims, too. In a report published in March 2019 by respected consulting firm Arthur D. Little [see PDF LINK at the end of this post] put Australia, South Korea and the US among a small number of 5G leaders, describing most other countries as either followers or laggards. If Huawei is 18 months ahead of its competitors, could three countries that make zero or minimal use of its equipment ever be 5G leaders? "How is it that the two leading 5G markets in the world are the US and South Korea?" asks John Strand, the CEO of advisory group Strand Consult.

One of Huawei's major European customers also takes issue with the claims about its 18-month technology lead. Arnaud Vamparys heads up the 5G technical program for Orange, which currently operates networks through Europe, Africa and the Middle East. In selecting 5G suppliers, he wanted diversity without compromising the reputation for network quality Orange established in the 4G era. "We finished with five suppliers able to roll out in Europe, namely Ericsson, Huawei, Nokia, Samsung and ZTE," Vamparys tells Light Reading. "I don't see this 18 months. Of course, you have positive and negative things in our benchmarks, but it is not so black and white."

Research muscle

Awestruck and Huawei-fearing observers have regularly drawn attention to the imbalance in research and development (R&D) spending between the Chinese vendor and its competitors. Last year alone, Huawei pumped a massive $18 billion into R&D, according to Ryan Ding, the CEO of its carrier business. Nokia's budget was just $4.8 billion, while Ericsson managed only $4 billion. Yet this comparison of headline amounts overlooks the huge differences between the three companies. "Ericsson is pure mobile and Nokia is mainly mobile plus some other things," says Strand. "Huawei's R&D budget covers chipsets, fixed line, mobile, cable TV solutions, AI solutions, data centers, mobile phones, laptops and tablets."

That budget even extends into activities outside its main addressable market, he says. Besides making telecom equipment, Huawei has also been a significant player in the solar energy business, according to Strand. Indeed, in June last year, it was reported by the UK's Financial Times to have shut down a US solar business that sold inverters, a type of electrical converter. The global significance of this solar business is unclear because Huawei's most recently published annual report, for 2018, makes only one cursory reference to the products it develops. "There is no transparency in the way they do things," says Strand.

Nor do the headline figures prove that Huawei allocates funds and spends them more efficiently than its rivals. The firm is understood to have a more scattergun approach than other vendors, a greater willingness (and ability) to support initiatives that might ultimately fail. While this risk-taking might boost the likelihood of breakthroughs, companies with far smaller R&D budgets have remained competitive in the 5G era.

The standout example is perhaps ZTE, another Chinese vendor whose entire R&D spending was less than $1.6 billion in 2018. Despite the gap with its rivals, ZTE increased its share of the overall market for telecom equipment by two percentage points last year, to about 10%, according to market research firm Dell'Oro. In 5G, Orange's Vamparys holds it in high regard. "It has very good technology and quality, even in standalone mode," he says. "It is one of our main vendors."

If Huawei does hold a technology advantage, it probably relates to the breadth of its product portfolio. No other vendor can provide the full spectrum of high-quality network equipment along with consumer gadgets, data center components and even some cable TV products. This makes Huawei a competitive threat in nearly all segments of the market, and a real danger when customers want to buy almost everything from the same vendor. But within specific areas, each of the leading suppliers could boast strengths, according to Stefan Pongratz, an analyst at Dell'Oro. Another analyst for a different organization is in broad agreement. Talk of an 18-month lead is "mainly rubbish," he says.

None of this would justify banning the Chinese vendor. Arguments about the security of Chinese equipment and illegal activities by Chinese firms are separate matters for consideration. Unfortunately, the spurious claims regarding Huawei's technology lead are being used to influence that debate one way or the other. Service providers and policymakers are right to worry about competition and supplier diversity, and Huawei must these days be acknowledged as a formidable technology player – just not one that has a monopoly on 5G expertise. <<

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Arthur D. Little's 16 page repoort referred to in the opening paragraph above is available in PDF format. That PDF is linked below:

The Race to 5G

Arthur D. Little
March 2019

- Eric L. -

To: Eric L who wrote (21)5/30/2020 12:02:51 PM
From: Eric L  Read Replies (1) | Respond to of 47
The 'D10' Club proposed by Britian is intended to limit Huawei reliance ...

Britain wants US to form a 10-nation 5G alliance to cut reliance on China’s Huawei

Agence France-Presse
29 May, 2020

• Proposed ‘D10’ club of democratic partners would include Australia, South Korea and India

• Issue is expected to feature at a G7 summit that Donald Trump will host next month

Britain said Friday it was pushing the United States to form a club of 10 nations that could develop its own 5G technology and reduce dependence on China’s controversial technology giant Huawei.

The issue is expected to feature at a G7 summit that US President Donald Trump will host next month against the backdrop of a fierce confrontation with China that has been exacerbated by a global blame game over the spread of the novel coronavirus.

Britain has allowed Huawei, the global leader in 5G technology, to build up to 35 per cent of the infrastructure necessary to roll out its new speedy data network. But Prime Minister Boris Johnson was reported by The Telegraph newspaper last week to have instructed officials to draw up plans to cut Huawei out of the network by 2023 as relations with China sour.

The Times newspaper said Britain is proposing a “D10” club of democratic partners that would include the G7 nations, Australia South Korea and India. It said one of the options involved channelling investments into existing telecommunication companies within the 10 member states.

Finland’s Nokia and Sweden’s Ericsson are Europe’s only current alternative options for supplying 5G equipment such as antennas and relay masts.

A Downing Street spokesman confirmed that Britain is reaching out to partners in search for an alternative to Huawei.

“We (are) seeking new entrants into the market in order to diversify and that is something we’ve been speaking with our allies about, including the United States,” the Downing Street spokesman said.

Johnson’s decision this year to include Huawei angered Washington because it believes that the private Chinese company can either spy on Western communications or simply shut down the British network under orders from Beijing. But his reported plan to eventually cut Huawei out of the network could significantly complicate London’s relations with China just as Johnson seeks new trade partners following Britain’s exit from the EU. Johnson challenged his US critics in January to come up with an alternative to Huawei if they did not want Britain to use the Chinese firm. <<

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- Eric L. -

To: Eric L who wrote (21)5/31/2020 6:05:53 PM
From: Eric L  Respond to of 47
Who owns Huawei?

This NYT article is 13 months old but I'm not sure that what they say about Huawei ownership has has been clarified to much if any extent in the interim.

Shenzhen, China — For one of the world’s largest technology companies, it should be a simple question:

Who owns Huawei?

As the Chinese smartphone and telecommunications equipment giant battles the United States government over whether it should be allowed to build the world’s mobile networks, the company has been going to great lengths to present itself as open, transparent and trustworthy.

It has not always worked out. One reason is that certain simple questions about Huawei do not have simple answers.

The chief secretary of Huawei’s board of directors, Jiang Xisheng, spoke for more than 90 minutes to a small group of reporters on Thursday. The goal was to help explain the company’s ownership after two American researchers wrote a report accusing Huawei of being misleading about the issue.

Mr. Jiang’s explanation boiled down to this: On paper, he said, Huawei is owned by a labor union that solicits donations from employees when their colleagues have health problems and the like. The union also supervises the company basketball club, Mr. Jiang said.

Naturally, it is a little more complicated than that.

Huawei’s ownership is a murky matter because the company has never, in more than three decades of existence, sold shares to the public. The firm says that it is entirely owned by its employees, and that no outside organizations, including any affiliated with the Chinese government, own shares.

But these assurances have never quite dispelled American officials’ suspicions that Beijing and the Communist Party are somehow pulling the strings. Top American officials have also been alarmed by new Chinese laws that require companies to assist in national intelligence work.

Huawei showed reporters on Thursday what it described as evidence of its independence: a big blue book, kept behind glass and under lock and key in a drab white room at the company’s headquarters in Shenzhen, a southern Chinese city.

Within its 10 volumes are said to be the names of all the Huawei employees who hold “restricted phantom shares” in the company — proof, the company says, that no piece of Huawei is owned by the Chinese government.

This, too, is not as simple as it seems.

Over the past year, Washington’s long-simmering distrust toward Huawei, the world’s leading maker of the equipment that powers cellphone networks, has morphed into an all-out assault on the company.

Huawei and its chief financial officer, Meng Wanzhou, are facing criminal charges in the United States related to theft of trade secrets and violations of sanctions on Iran. American officials have urged other governments to bar mobile carriers from using Huawei’s gear in their next-generation wireless networks, arguing that oceans of sensitive data could be exposed to Chinese intelligence-gathering.

To counter claims that it is opaque and secretive, Huawei recently reported quarterly financial results for the first time. And it has invited reporters from around the world to interview company leaders, including Ren Zhengfei, its powerful founder and chief executive.

But to Huawei’s critics, such gestures hardly put to rest the question of whether the company is susceptible to Chinese state influence.

China’s government exerts control over the country’s private businesses in many ways, some of them unofficial and never disclosed. Huawei executives have said repeatedly that they do not act on Beijing’s behalf. But absent the kind of constant, independent scrutiny that a publicly listed company would face, outsiders can only decide whether to take Huawei’s word for it.

“It’s hard to prove if you’re not at least a partially publicly traded company,” said Xiaomeng Lu of Access Partnership, a policy consulting firm.

By exposing themselves to the vetting needed to list their shares on American stock exchanges, Ms. Lu said, other Chinese technology firms have put the wider world at greater ease about the way they are run.

“That’s a kind of seal of approval,” she said.

Huawei, however, believes it has flourished because it does not face the short-term financial pressures that publicly held companies do. So the company has devised an ownership structure that allows it to use shares to motivate employees while still remaining closely held.

Here is where it gets complicated.

According to Chinese corporate records, Huawei Technologies is wholly owned by a holding company called Huawei Investment & Holding.

That holding company has two shareholders, corporate records say. Mr. Ren, Huawei’s chief executive, owns a little more than 1 percent of shares. The rest are owned by an entity called the Union of Huawei Investment & Holding.

This is Huawei’s labor union, Mr. Jiang said on Thursday, and it owns most of the company purely out of legal convenience. Under Chinese law, only certain kinds of entities can be the registered owners of a closely held company, and a labor union is one of them.

The union has no influence over the company’s business operations, Mr. Jiang said. It does, however, supervise after-work activities for employees.

That basketball club, for instance. The badminton and table tennis clubs, too, Mr. Jiang said.

Huawei’s union is registered with the Shenzhen city government’s union and pays dues. But the municipal union has no influence over the Huawei union’s operations or the company, Mr. Jiang said.

What, then, does Huawei actually mean when it says that it is employee owned? Mr. Jiang described the company’s program for allowing workers to own a kind of virtual Huawei stock.

Shares of this virtual stock let employees share in the company’s financial success (and its losses). And they entitle their holders to elect members to Huawei’s Representatives’ Commission, which in turn elects members of the board of directors.

Technically, all of this is separate from the union, which is the company’s registered legal owner. Huawei’s virtual shares also differ from conventional shares in key ways.

They cannot, for instance, be transferred to others or owned by nonemployees. And if an employee leaves Huawei, the company buys the shares back, unless the employee has reached a certain level of seniority.

The researchers who wrote the report questioning Huawei’s ownership — Christopher Balding, a professor at Fulbright University Vietnam, and Donald C. Clarke, a Chinese law expert at George Washington University — say Huawei’s virtual stock program “has nothing to do with financing or control” and is “purely a profit-sharing incentive scheme.”

Mr. Jiang rejected this argument, saying that holders of Huawei virtual shares bear the risk that their shares will decline in value, and that they are entitled to a portion of the company’s assets if it goes bankrupt.

Still, he acknowledged on Thursday that it was unclear whether Huawei’s efforts to explain all this would assuage any concerns in Washington.

“With some people,” he said, “no matter what you say to them, they will only say what they want to say. They won’t listen to you.” <<

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- Eric L -

To: Eric L who wrote (21)6/18/2020 12:11:23 PM
From: Eric L  Respond to of 47
5G SEP Patent Ownership and Leadership ...

>> Huawei's patents won't save it, says leading analyst

Iain Morris (Morris Lore), News Editor
Light Reading
June 09 2020

Patents ownership in telecom is a murky affair. Even the experts can't sort which patents matter and which are fundamentally worthless, and standards bodies have kept the lights switched off. Macho posturing is consequently rife. Patent owners regularly crash about in the gloom, boasting about the size of their portfolios. China's Huawei, for instance, needs no encouragement to flaunt its big numbers.

Claims of technology leadership based on these raw figures always looked spurious, as Light Reading wrote in March. Now a leading telecom analyst has also cast aspersions on the data. Formerly a well-respected sell-side analyst for Nomura Securities, Richard Windsor today runs his own research business – Radio Free Mobile – and blogs about technology matters. In his view, size most definitely does not matter in 5G patents, and Huawei is far less impressive than it makes out.

Windsor takes aim, in particular, at a 2019 study by GreyB, a research company, which identifies Huawei, Samsung and LG as the real powerbrokers in 5G. Huawei not only holds more 5G-related patents than any other company (some 13,474), according to that study. It also holds a bigger share of standard-essential patents (or SEPs) – about 19% of them, to be precise, versus 15% for Samsung, 14% for LG, 12% for each of Nokia and Qualcomm and just 9% for Ericsson.

There is an obvious correlation between those two sets of numbers, and Windsor isn't convinced. GreyB's analysis is flawed, he reckons, in its definition of an SEP. Using an airplane as an analogy, he basically says there are two types of SEP – the one that keeps the plane flying and the one used for seats and drinks trolleys. Both are needed for the plane to "fulfil its function," he writes, but "the IP [intellectual property] for the engines, ailerons and wings is much more essential than the seats and drinks trolleys." Huawei's role in the seriously important area is probably overstated.

While it's a hard point to prove conclusively, there are some compelling signals. For one thing, if GreyB is right, both Huawei and Samsung would have had to leapfrog other companies in the patents league table during the transition from 4G to 5G. That's improbable, says Windsor, because 5G relies on a lot of the same "core" IP as 4G, including the OFDM (orthogonal frequency division multiplexing) coding system.

In his own words: "In the 4G patent count, Huawei and Samsung, in particular, have a much smaller share, raising the question of how they came from so far behind in a similar standard to lead 5G. One answer could be that they have developed IP that looks more like seats and drinks trolleys rather than engines and consequently their contribution is less valuable than it appears."

The other clue is in Qualcomm, which generates more in royalties per device than any other player and seems impossible to avoid. For evidence of that, take note of recent litigation between Apple and Qualcomm, when Apple was forced to give way. "The fact that it felt it had to use Qualcomm is a strong indication that when it comes to working product, Qualcomm (and I suspect Nokia and Ericsson) has a much stronger position in 5G than this study gives them credit for," writes Windsor.

It's a timely intervention by Windsor. The global 5G standard so dependent on Huawei's expertise may rupture if the US continues to treat the Chinese firm like a hi-tech villain, the company has recently suggested. "If further fragmentation were to take place, the whole industry would pay a terrible price," said Guo Ping, one of Huawei's rotating bosses, during a press conference in May. If Huawei is grandstanding about its 5G patents, as Windsor suspects, any threats about standards fragmentation could lose their venom.

Windsor is not the first person who has attempted to shine some light on the 5G patents situation. In 2019, legal experts at Bird & Bird compared several different studies used to support claims of Huawei's technology leadership. Many, they said, were "too simplistic," failing to distinguish between essential and non-essential patents. Determining what constitutes an SEP was another issue, according to the lawyers. Without the clarity the industry is either unwilling or unable to provide, the macho posturing is bound to continue. <<

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- Eric L -