Huawei sanctions won’t affect Cyprus 5G rollout

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Cyprus’ 5G network rollout is not expected to be hindered by sanctions placed on tech giant Huawei and other Chinese telecom firms by the US and UK governments, officials said.

As Cyprus comes closer to rolling out its 5G network moving forward with permits for 5G platforms expected to be approved before the end of 2020, doubts persist after the UK banned Chinese vendors.

Essentially, UK Prime Minister Boris Johnson brought down the curtain on the so-called “golden era” of commercial relations with China by excluding Huawei from the development of Britain’s hi-tech 5G mobile communications network casting shadows on the rollout of the revolutionary technology in the rest of the continent.

Experts said the commercial standoff between China and the United States is not currently threatening to delay the implementation of 5G s in Cyprus and the rest of the EU.

They note that decisions to ban Chinese companies, including Huawei, is more about geopolitics and domestic politics as it is about technology and concerns over security and will not alter the island’s path to rolling out its 5G network.

In comments to the Financial Mirror, Antonis Polemitis, University of Nicosia CEO and professor in Digital Currency said Cyprus is caught up in this commercial quarrel between two superpowers but does not see it posing an imminent threat for its 5G plans.

“5G will be deployed in Cyprus, whether Chinese vendors such as Huawei are excluded from the process.

There is not much Cyprus can do but wait for the European Union to take its decisions, which at the moment does not seem to be leaning towards excluding Chinese vendors”.

He did, however, note that just in January the UK government had approved a compromise solution in giving Huawei up to 35% of the market, only to make a U-turn six months later.

“Just six months after approving Huawei involvement in the development of the futuristic network, the prime minister slapped a ban on UK operators purchasing any of the company’s equipment after the end of this year and said any 5G kit already installed must be ripped out by 2027,” Polemitis said.

No Trump, no problem

Electronic Communications and Postal Office Commissioner George Michaelides said: “As the commercial standoff between China and the United States is a dynamic process, affected by a change in policy, especially in the US, we might see sanctions withdrawn and the scenery changing in the near future.”

He added that Downing Street’s decision was forced by US sanctions imposed by Donald Trump on security grounds in May, which could mean that a change in President, could overturn the situation.

“Sanctions in the USA may be lifted, and the UK might develop a different stance on the matter.”

Michaelides said that if any limitation is applied to Chinese firm Huawei’s product promotion (over security fears), that would see 5G growth delayed in Europe and Cyprus.

He, however, clarified that in any case, Cyprus’ 5G rollout will not be affected by the sanctions on Huawei or other Chinese companies.

“Each country will be making its own decisions regarding who it will be assigning network platforms to and which companies are to be considered eligible vendors providing the equipment to the companies.”

Cyprus’ Deputy Ministry of Innovation said it will be issuing a tender for the country’s 5G network platforms with permits expected to be approved before the year’s end.

The innovation ministry announced on Tuesday it will soon launch a tender with a mandate to roll out 5G by 2025 with up to 70% of the population having coverage and the highways.

The permit process, which is overseen by the Department of Electronic Communications, is a legal requirement for all EU member states.

It specifies the tender will grant licenses between the frequency spectrum available on the 700 MHz and 3.6 GHz bandwidths.

Michaelides said Huawei has already signed memorandums of cooperation in the Republic of Cyprus amid efforts to create conditions for a smooth introduction and development of the 5G network.

He argued that currently, more than 90% of consumers in Cyprus are served in one way or another by Huawei products while companies such as Epic and CyTA (4G) rely on infrastructure equipment from the Chinese communication giants.

“The company has a 10-year presence in Cyprus and has developed extensive partnerships with all telecom providers in the country to provide high-level IT and communications services and a rapid transition to a digital transformation of the country that will lead to the further development of the Cypriot economy,” said Michaelides.

Experts have argued that one of the reasons why Huawei 5G technology was blocked in some countries and regions was more about price than anything about security.

A commentary published by Bloomberg said Huawei could offer the technology at 20% cheaper than competitors.

But the US and its allies insist Chinese companies would pose risks for consumers in such a sensitive domain.

Michaelides did not comment on the actual cost of equipment but did note that any change in policy would mean Cyprus providers having to root out all existing installations, mainly 4G which will initially be used for 5G technology, at a massive cost.

“A possible change in policy would see providers having to shoulder the cost of uprooting existing installations and replacing them with equipment from other companies.

We are talking of huge costs, which the companies will have to roll down to consumers. No state would like to see that happen.”