US official focuses on 5G opportunities during Middle East visit

Keith Krach, US undersecretary of state for economic growth, energy and environment, sees the UAE as a top destination for 5G investments

Keith Krach, US under secretary for economic growth, energy and environment, talks with South Korea's Foreign Minister Kang Kyung-wha (not pictured) during their meeting at the Foreign Ministry in Seoul on November 6, 2019. (Photo by HEO RAN / POOL / AFP)
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The US is pressing its case against the Chinese telecoms manufacturer Huawei as part of a diplomatic offensive that has seen a top American official tour 16 nations in the Middle East and Europe.

Speaking at a roundtable on Wednesday from Washington, Keith Krach, US undersecretary of state for economic growth, energy and environment, said the US is determined to promote 5G security and its Clean Network programme, taking a swipe at Huawei and its Chinese counterpart ZTE.

The Clean Network Initiative is "the Trump Administration’s comprehensive approach to safeguarding the nation’s assets including citizens’ privacy and companies’ most sensitive information from aggressive intrusions by malign actors, such as the Chinese Communist Party", according to the US State Department. It was rolled out in August by US Secretary of State Mike Pompeo.

“This programme addresses the long-term threat to data privacy, security and human rights … it is rooted in internationally accepted digital trust standards and built on a coalition of trusted partners and based on rapidly changing technology and economics of global markets,” said Mr Krach, who flew back to Washington after meeting officials in Abu Dhabi on Monday.

The Clean Network programme fits well with the UAE’s vision of “secure and forward-looking economy”, he said.

“It [the programme] is critical for the UAE to drive private sector investment from the US and other nations.”

More than 45 countries, 70 telcos and companies such as Fujitsu, Telefonica, Taiwan Mobile, Softbank, VMWare and Reliance Jio have extended their support to the programme, Mr Krach said.

“The momentum is growing and more members are adding. We want to ensure that [companies’] confidential data, proprietary technology and intellectual property rights are protected,” he added.

“At the start of the year, Huawei had around 90 5G contracts but slowly its deals with telecoms operators around the world are evaporating … countries are only allowing trusted vendors in their 5G networks,” he said.

Washington is aggressively lobbying its allies to exclude Huawei’s equipment from their core 5G networks. The Shenzhen-headquartered company has already been hit with trade sanctions by the US that are also affecting its global smartphone business.

Huawei has repeatedly denied links to the Chinese government, stating that it is "a private company, owned solely by our employees".

"No third parties hold any shares in the company, and that includes the Chinese government," the company says on Huawei Facts – a website the company set up to dispel claims about its operations.

It also denies allegations of intellectual property theft, saying it has more than 85,000 patents in informational and communications technology.

"Since 2001, Huawei has paid more than $6 billion to license IP from third parties, 80 percent of which was paid to US companies," it says.

Currently, five large vendors – Ericsson, Huawei, Nokia, ZTE and Samsung – are supplying 5G radio network equipment such as base stations of core networks to telecom operators worldwide.

A 5G network promises an internet speed of up to 1.2 gigabits per second, which will gradually reach 10Gbps – more than 100 times faster than 4G.

At a cost of $700bn to $900bn, the initial installations of 5G will cover only 25 per cent of the world's population by 2030, or about 2 billion people, according to McKinsey.

The consultancy predicts coverage will be focused largely in wealthy and developed areas in the US, Europe and China.

The US sees the Emirates as an apt destination for 5G investments that will form the backbone of future economies and public services.

The signing of the historic Abraham Accord to normalise relations with Israel is a step towards a secure, stable and prosperous region, Mr Krach said.

“The UAE is a perfect global hub for companies looking forward to expand. It is the real crossroads of the world and has tremendous infrastructure and great human capital,” said Mr Krach.