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Tuesday, May 14, 2019, 15:13
Technology rules: How the US is falling behind on the 5G race
By Henry Chan
Tuesday, May 14, 2019, 15:13 By Henry Chan

The United States has led telecommunications technology since the early 19th century. The country produced Samuel Morse who invented the telegraph and Alexander Graham Bell who invented the telephone, and leads in mobile communications technology from the first-generation analogue phone up to the current 4th generation LTE smartphone. 

But at the moment, the US is falling behind China in the 5G technology area. The ensuing question of why has generated speculation that can be summarized as follows:

Firstly, the US carriers made some poor technological decisions.  

It is the Law of Physics that as the radio frequency of transmission over the air goes up, its information carrying capacity will also go up as more bandwidth becomes available at a higher frequency. However, you will compromise on the coverage area as high-frequency radio wave has poor long-distance transmission characteristics as obstacles along its transmission route easily block it.

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Three radio spectrums are being used in mobile communication, the low-band from 450 MHz to 3 GHz, the mid-band from 3-6 GHz and the high-band from 24 GHz upward to around 80 GHz. The high-band is popularly known as millimeter Wave or mm-Wave. 

The earlier generations of mobile communication from 1G to 4G use the low-band as it has high area coverage advantage even as its capacity is low; the capacity is not much an issue as the earlier 1G to 4G phones does not need that much capacity anyway. The coverage area of the mobile cellular network is closely related to the cost of setting up the entire system as a more broad coverage area cut down the number of required cell sites.  

Compared to Asian leaders in mobile communication, the US falls behind in developing the mobile communication-based applications which hampers the ability of US carriers to monetize their investment in 5G

In the 5G era, however, the technical requirement over carrying capacity becomes a critical factor in the system setup. Most of the countries work on the mid band to get the proper balance between capacity and coverage while working at the same time to solve the low coverage problem inherent in the high-band that requires a significant increase on investment to put up more cellular sites.

China is particularly successful in this step-by-step approach. It concentrates the initial 5G setup in the mid-band 3-4 GHz area while continuing to improve its technology on the high band. The dominant US carrier such as AT&T and Verizon concentrate on the high-band mm-Wave technology.  

In a report by the US Defense Innovation Board released on April 3, it found that at the same transmission rate of 100 Mbps, the typical Chinese standard 5G trial and deployment at 250 MHz at 3.4 GHz can cover five to six times more area than the regular US 5G trial and implementation using 425 MHz at 28 GHz. The American carriers failed to overcome the technical challenges to implement a supposedly better technology.

Secondly, the bureaucratic inertia of the US has impact. 

Many technical experts had pointed out some time ago that the mid-band 3-4 MHz was the technical choice of many countries and the US should release the mid-band to facilitate the development of 5G. Federal agencies use most of the bandwidth in the 3-4 GHz, and there is a need to reassign the frequency. 

But the US Federal Communication Commission delayed its decision, and the first release of 150 MHz took place in late 2018, and more frequency will be released in late 2019. This loss of valuable time on technology development is another compelling reason for the loss of American leadership.

Thirdly, the merger of Lucent with Alcatel in 2006 has deprived the US of radio access network (RAN) companies. 

In the mobile communication industry, two critical infrastructure providers are RAN and core network manufacturers. There are only four mobile equipment manufacturers today that can provide end-to-end solutions today, and they are Huawei, Ericsson, Nokia and ZTE. Many analysts blamed the misjudgment on technical challenges facing mm-Wave deployment reflects the lack of airwave expertise of US carriers.

Fourthly, the US lags in developing the mobile-based communication eco-system.   

Compared to Asian leaders in mobile communication, the US falls behind in developing the mobile communication-based applications which hampers the ability of US carriers to monetize their investment in 5G. The first application promoted by the US carriers on 5G is in the mobile broadband area, while China is moving into 4K broadcasting, remote surgery and other higher value-added activities. 

It is well known that the capital investment in 5G is much higher than the earlier generation of mobile communications because of the need for putting up more dense facilities. There has been a clamor for the US government to invest in a national mobile network last year in the face of the financial pressure placed on 5G deployment. But US President Donald Trump rejected the idea of national broadband in his recent speech on April 12.

Fifthly, the ascendancy of new East Asian telecom manufacturers indirectly leave the US behind on the technology race.

Based on IPlytics patent database, as of March 2019, China had filed for 34 percent Standard Essential Patent (SEP) on 5G, in addition to the 25 percent filing of South Korea. 

Standard-essential patents are the more critical patents on 5G that most 5G equipment likely uses them and pay a royalty to the SEP holders. The Chinese ascendancy in 5G technology is particularly notable, the country’s 34 percent share is more than half its share of the 4G patent of around 22 percent. In the earlier generation of mobile communication, companies in the US and Europe held the most SEPs.

However, the US still possesses more semiconductor know-how than any other country in the world. The semiconductors are vital engines in driving the telecommunications industry and the ultimate deployment of 5G hinges on expertise in mm-Wave. The next phase of 5G leadership race will depend on which country can master the next generation of mm-Wave technology. 

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The combination of 5G and AI promised to provide the platform to revolutionize many applications, and the new technology competition will accelerate the pace of the 4th Industrial Revolution and benefit the global economy. 

The new global pecking order on telecommunications technology depends on which country can effectively bring out reliable mm-Wave technology. In the end, it is the technology that decides the outcome of the 5G race.

The author is a senior visiting research fellow at the Cambodia Institute for Cooperation & Peace. His primary research interest is Chinese economic development, ASEAN-China relations and the 4th Industrial Revolution. 

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