Spark's 5G aspirations have become a pawn in the East, West battle over Huawei

Saturday, 2 March 2019

Spark boss Simon Moutter is keen to lead the race to 5G.

OPINION: You've got to feel sorry for Spark head honcho Simon Moutter. The compact but perfectly formed Spark chief executive made a very public commitment to lead the race to 5G last year.

He even went so far as to kick off a countdown to 5G go-live and tied it in with Spark's sponsorship of Team New Zealand's America's Cup campaign.

He rightly understood that 5G wireless would unlock new growth in the economy and probably also new growth in telecommunications revenue for the brave company that took the lead.

Which was all well and good, until the Government Communications Security Bureau (GCSB) stymied Spark's proposal to use 5G equipment from Huawei late last year.

* Next development in Huawei saga may not be about 5G

Spark boss Simon Moutter, understood that 5G wireless would unlock new growth in the economy and for the brave company that took the lead.

* Jacinda Ardern says New Zealand is not discriminating against Huawei

* Tough calls ahead on 5G mobile roll-out**

Spark has become a pawn in a bigger game being played out on the world stage as several Western countries are in the process of considering how they want to deal the biggest Eastern one.

Moutter is now stuck between a rock and hard place. A plan that has been in the making for several years and would make Spark the catalyst to business unleashing the capability of 5G wireless is now effectively paralysed.

The Government Communications Security Bureau stymied Spark's proposal to use 5G equipment from Huawei.

Currently it appears politically unpalatable to have Spark move forward in its construction of the 5G network if it has Huawei as a partner.

While Spark remains keen as mustard to progress, the best way to do this is unclear.

One way forward would be for Spark to try to ameliorate GCSB's perceived risks by throwing in mitigations. However, given the diplomatic dynamite at risk here that's likely to be difficult.

Another way forward is to do what some have suggested and for Spark to 'double down' on the existing 4G wireless network. Exactly what form that would take is unclear to me.

On the one hand it might take the form of pushing 4G into currently under served regions which still rely on 3G, regions like the high country, the Awhitu Peninsula and the West Coast.

On the other it might take the form of trying to develop some form of 4G plus that delivers linear increases in data delivery (as opposed to the exponential ones in 5G). Again sounds a bit sucky to me.

Spark is closely tied its 5G aspirations its sponsorship of Team New Zealand's America's Cup campaign.

A third option is to start exploring alternative partners.

The normal suspects here are likely to be Ericsson and Nokia.

Verizon recently rolled out the first 5G networks in the United States. Called 5G Home, it is a residential broadband service offering download speeds of 300MB per second in Los Angeles, Houston, Indianapolis and Sacramento.

To give you an idea of how fast that it, that's literally 110-times faster than the link I'm currently using to write this column. But its not just speed that makes 5G so desirable.

It's the world of artificial intelligence it enables not just machine learning but deep learning.

It will also unlock the internet of things, with the super low latency times enabling it to handle billions of nodes of web connection.

At a household level that probably means that rather than just having your Amazon Echo, Netflix account and perhaps your heating controllable via mobile; you could have 20 devices connected.

Mike O'Donnell says Spark may turn to United States technology companies like Verizon and Alcatel to supply it with a 5G network.

While the implications for householders are nice, for a business it's game-changing.

And that is why 5G is so important. It unlocks the next paradigm of benefits and value from the internet (not just the web).

So it might be that Spark is sending its casually-hip techies across to Verizon or Alcatel right now to work out a backup option.

While I'm sure these companies do good work, I'm not sure they are qualitatively different to Huawei when it comes to the potential for Government agencies to access the material that is served by its wireless network and terrestrial kit.

Based on the revelations around Prism several years ago, there must be a chance that the likes of the CIA are able to filter and examine content flowing across the platforms operated by these companies.

Prism is a programme run by the US National Security Agency which collects internet communications from various US internet companies and is reportedly America's best source for raw data for government security intelligence agencies.

So a question for the Government to consider is whether it is more comfortable with the possibility of the US government having access to 5G content than the Chinese authorities.

Just to make it all interesting are last week's reports that Britain's GCHQ spy shop reckoned it might be able to mitigate the risks of Huawei to build 5G in the United Kingdom.

But given all the international relations implications it might not be that simple – a phrase with special meaning when it comes to doing business in the East.

A long time ago I did a little bit of work with the former trade Minister Tim Groser. When I asked him about the doing business with China he had two pieces of advice for me.

First, don't try to come up with Western solutions to Eastern problems. Second, it's not just what you do, its how you say it that makes or breaks a deal.

He may have been on to something I reckon.

Mike 'MOD' O'Donnell is a professional director, digital advisor and broadcaster. His Twitter handle is @modsta and he's pretty fizzy about 5G.

* An earlier version of this article incorrectly named Verizon and Alcatel as 5G equipment manufacturers.