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The most recent 3GPP meeting was held in Australia in September 2018. It finalized its Release 15 standards, clearing the way for the transition into 5G. The 3GPP reached a new level of sophistication and scale, setting out an integrated suite of technology migration options for communications service providers (CSPs) around the globe to get from 4G into 5G.

The 3GPP process is not often recognized for its achievement. The organization has been around for about 20 years. It has steadily built credibility as its standards have been adopted globally, and this has had enormous benefits. The existence of a shared global standard for mobile technology has increased both economies of scale and levels of vendor competition, to the benefit of CSPs and downstream users. This has in turn helped to drive the rapid uptake of mobile technology around the world. It is truly a rising tide that has lifted all boats.

This achievement is not simple to deliver. The 3GPP has over 600 member organizations including governments, operators, network providers, equipment vendors, academia, and research institutes. The various committees may contain hundreds of individuals who meet to hammer out different aspects of the standards. This scale has both advantages and disadvantages. It delivers the intellectual volume needed to address large, complex technical problems, but it also means that over 600 organizations must agree to the results. It takes time to build that consensus, but it results in a large community supporting the deployment of the standard. While there was some competition between technology solutions for earlier generations of mobile technology, 3GPP has created a global consensus for 5G.

How durable is this consensus? It now faces an emerging threat. Against a backdrop of growing geopolitical tension, critical infrastructure security is becoming a bigger issue. Australia's recent decision to effectively exclude Chinese telco vendors from 5G may be a harbinger of similar moves in other markets. Canada, New Zealand, and India are also reportedly reviewing Chinese vendor participation in their telecoms network supply chains.

We offer no assessment of the national security risks (though we note that no substantiated problems with Chinese vendors have yet emerged). However, we do have a view about the impact of the ecosystem fragmentation that could happen if this trend runs unchecked. It could lead to the re-emergence of political and technological spheres of influence that would fragment the global technology ecosystem. This would unquestionably be bad for global competition and for telecommunications users everywhere.

The telecoms industry will bear the brunt of any moves to restrict vendor choice and technology access. In Australia, it is acknowledged by telcos (off the record) that the decision to ban Chinese vendors will result in higher 5G costs as vendor competition will be muted. These costs will in turn flow through into vertical industries that rely on that infrastructure. This would disproportionately affect smaller markets that rely on a global vendor community to generate the economies of scale they cannot generate domestically.

This sobering prospect highlights just what an achievement the 3GPP has been, and how much is at stake in its continued success. While national security concerns must be addressed, it is imperative that this be done in the least-disruptive manner possible. No one should want a return to the bad old days of proprietary vendor technologies; on that much, at least, it should be possible to agree.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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