SK, KT, LGU+ in dilemma over Huawei's 5G equipment

Security personnel stand near a pillar with the Huawei logo at a launch event for the Huawei MateBook in Beijing in May 26, 2016. Huawei Technology has a reputation for manufacturing high-quality network equipment at competitive prices, but Korean telecom firms are at a crossroads when it comes to decide on whether to select the Chinese equipment for their 5G network due to security concerns. / AP-Yonhap

By Jun Ji-hye

Telecommunication companies here are facing a dilemma whether to adopt Huawei Technology's equipment for their fifth-generation (5G) networks scheduled to be commercialized next year.

Network equipment produced by Huawei, the Chinese smartphone and telecom equipment maker, is said to be price competitive and have technological prowess, but is also subject to security concerns.

The United States, Korea's major ally, has openly held the Chinese equipment in check, calling on AT&T, a U.S. mobile carrier, to cut off its business relations with the Chinese firm.

The nation's telecom companies _ SK Telecom, KT and LG Uplus _ plan to select suppliers of equipment for their 5G networks and begin investing in equipment in June as soon as a frequency auction takes place that month to commercially launch the networks on time.

SK Telecom engineers test 5G base stations near the company's network testing site in downtown Seoul in this photo. Korean telecom companies are making efforts to commercialize their 5G networks by next year. / Courtesy of SK Telecom

Earlier this year, the firms have sent requests for proposals (RFP) to companies dedicated to developing commercial equipment, such as Huawei, Samsung Electronics, Nokia and Ericsson.

Huawei has displayed advanced technologies in the 5G frequency band of 3.5 gigahertz, releasing its first 5G chipset Balong 5G01 during the Mobile World Congress (MWC) 2018 held in Barcelona in February. At the time, the firm said it is ready to commercialize 5G smartphones with the chipsets in the second half of the year.

Jeong Jae-hoon, an analyst at Samsung Securities, said Huawei has focused on the 5G frequency band of 3.5 gigahertz, which is adjacent to the LTE frequency with 2 gigahertz range. The proximity enables telecom firms to have the advantage of building a nationwide network more easily.

"Huawei is seeking to become a mass market player by concentrating on the frequency with 3.5 gigahertz range," said Jeong.

But the United States has been negative about introducing the Huawei equipment especially after its congressional report stated in 2012 that such equipment could be used in espionage activities.

Another shameful case took place in 2003 when the U.S.-based Cisco Systems filed a lawsuit against Huawei, claiming unlawful copying of its intellectual property. At the time, the Chinese firm was alleged to have stolen Cisco's technology to develop a line-up of routers and switches. Twenty months later, Cisco dropped the lawsuit after Huawei promised to modify its product lineup.

In accordance with the government's negative position, AT&T gave up its plan to release Huawei's new smartphones in the U.S. market in January.

In December 2016, three Republican members of Congress, including Rep. Steve Chabot, also urged the Pentagon to inspect the security risks to U.S. facilities and the 28,500 military troops stationed in Korea posed by Huawei's potential role in the 5G network, according to the U.S. media reports.

The U.S. position is influencing Korean telecom companies although the Chinese firm claims its products have no security issues.

A basic position of telecom companies is not ruling out a certain company when choosing 5G partners.

But, during the MWC, SK Telecom CEO Park Jung-ho acknowledged that Huawei could be a cause of concern when choosing a supplier of network equipment.

Yoo Young-min, minister of science and ICT, also said earlier this month, "If Huawei's equipment is introduced, there is the possibility that various security problems become an issue."
The minister said the government will work on the commercialization of the 5G network considering those issues.

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