Newsletter
The US administration has announced a new $1.5 billion plan to replace Huawei and ZTE 5G telecom gear with equipment made in the United States. This is a part of a bigger plan to ditch Chinese equipment from the US telecom network.
Huawei and ZTE are producing the most affordable 5G equipment, and many countries are waiting to buy their gear. In the United States, however, both companies are blacklisted due to their suspicious relationship with the Chinese government. FCC has also killed the Huawei and ZTE dream of returning to the US market.
The US government is allocating $1.9 billion to remove Huawei and ZTE equipment from rural carriers. Another $3 billion will also be allocated after Congress approval.
The US government to replace Huawei and ZTE gear with American-made 5G equipment
The government plan is beyond a “rip and replace” job. The plan is to develop an exclusive “standards-based” alternative to Huawei, ZTE, Ericsson, Nokia, and Samsung. In a nutshell, no foreign company should be allowed to participate in the US 5G development program. The wireless companies in the country should also buy 5G equipment from domestic producers.
The US 5G program will reportedly rely on ORAN (Open Radio Access Network). Oran could replace foreign networking equipment with standard computer parts. The budget for the plan comes from the Chips and Science Act.
ORAN is already used by Dish Wireless in the United States to develop 5G across the country. Dish Wireless has a $1 billion deal with Samsung to supply RAN, vRAN software, and ORAN radio units from the Korean manufacturer. With the new US government announcement, Dish Wireless might have to reconsider its deal with foreign manufacturers. Verizon also has a similar contract with Samsung.
Ditching Huawei and ZTE from 5G development programs will force the US government to spend more money on buying related equipment. However, domestic production can eliminate security threats- to some extent- and create jobs for Americans.