The United States and its allies should take controlling stakes in Nokia, Ericsson or both to battle Chinese telecoms giant Huawei’s dominance of the 5G market, US Attorney general Bill Barr said Thursday.
“There are only two companies that can compete with Huawei right now: Nokia and Ericsson,” Barr said in a speech on the Chinese economic threat.
“The main concern about these suppliers is that they have neither Huawei’s scale nor the backing of a powerful country with a large embedded market like China,” he said.
Barr, who was speaking at a conference on China’s security threat at the Center for Strategic and International Studies in Washington, spent 14 years as top executive of US telecommunications companies GTE and Verizon before leading the Justice Department.
He said there are already proposals on the table for the United States “aligning” itself with either or both Ericsson, a Swedish company, or Nokia of Finland.
The proposals involve “American ownership of a controlling stake, either directly or through a consortium of private American and allied companies,” he said.
“Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power.”
“We and our closest allies certainly need to be actively considering this approach.”
Barr described Huawei, which already dominates the unfolding, next-generation 5G communications market, as a deep threat that, if uncontested, would give Beijing “unprecedented leverage” over US and Western industry and security.
“If China establishes sole dominance over 5G, it will be able to dominate the opportunities arising from a stunning range of emerging technologies, that will be dependent on, and interwoven with the 5G platform,” he said.
“From a national security standpoint, if the industrial internet becomes dependent upon Chinese technology, China would have the ability to shut countries off from technology and equipment upon which their consumers and industries depend.”
“Given the narrow window we face, the risk of losing the 5-G struggle with China should vastly outweigh all other considerations,” he said.