US signs 5G security deal with Bulgaria, North Macedonia, and Kosovo. Who benefit Bulgaria or USA who are losing a critical competitive advantage in 5G?

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US signs 5G security deal with Bulgaria, North Macedonia, and Kosovo

               North Macedonia, Kosovo and Bulgaria joined the US agreement aimed at stemming Chinese influence in 5G infrastructure. The US and EU also launched bilateral talks to discuss China issues.
            The question is how Bulgaria will benefit from the agreement or this is a simple try to stop China domination on the 5G networks and again in the end, Bulgarian consumers will pay the higher price. 
             The United States risks losing a critical competitive advantage if it fails to capitalize upon the opportunity and manage the challenges of 5G. Today, China seems poised to become a global leader and first mover in 5G. The United States may be situated in a position of relative disadvantage. The U.S. government has yet to commit to any funding or national initiatives in 5G that are close to comparable in scope and scale to those of China, which is dedicating hundreds of billions to 5G development and deployment. There are also reasons for serious concern about the long-term viability and diversity of global supply chains in this industry. Huawei, a Chinese company with global ambitions, seems to be on course to become dominant in 5G, establishing new pilots and partnerships worldwide.

            The US has become increasingly concerned about the dominance of Chinese companies in constructing 5G internet networks. 
             Like any private sector companies, Ericsson, Huawei and Nokia (No USA company in the list), the ruling triumvirate of 5G network equipment makers, are traditionally measured on their financial performance. But these days they prefer to square up to one another by flaunting the 5G deals they have won. Naturally, portfolio size matters. Naming customers also earns kudos, or so Ericsson and Nokia believe.
            Huawei was the latest to strut its 5G stuff. At what was supposed to be a pre-Mobile World Congress (MWC) event in February 2020, but turned out to be the first of two no-MWC events following the giant trade show’s shock cancellation, the Chinese company in London boasted of 91 5G deals, including 47 in Europe, where some politicians fear it is a conduit for Chinese spying. This number puts it ahead of Ericsson, which claims 81 agreements, has named 35 customers and points out that 25 networks are “live.” Nokia brings up the rear, with 67 deals, 40 named customers and 19 live networks.
             These figures, when taken at face value, suggest the Chinese vendor is winning the 5G technology race. Both supporters and critics could latch onto them as evidence of the company’s supposed “18-month lead” over competitors. In fact, they show nothing of the sort. At best, they merely confirm that a US-led campaign against Huawei has so far had minimal impact on its market position. At worst, they serve to obfuscate what really matters.
            There are two glaring problems with the deal metrics. First, just about every service provider in the world will eventually upgrade to 5G if it is planning any kind of future. 5G is a must-have, not a nice-to-have, and operators currently have few supply alternatives to Ericsson, Huawei and Nokia. Second, when it comes to mobile infrastructure, market share positions are fairly entrenched due to vendor incompatibility. If an operator wants to change suppliers with the introduction of 5G, it must use the new vendor’s 4G equipment as well, replacing the legacy provider, to avoid any interoperability problems. The costliness of this overhaul partly explains why some European operators are lobbying fiercely against a Huawei ban.
             Switching to a new vendor should, in theory, become easier with a newer “standalone” variant of 5G technology, less dependent on the 4G system than today’s “non-standalone” networks. Yet even here there are barriers to change, according to Fredrik Jejdling, the head of networks for Ericsson. “There are too many benefits of using the same vendor rather than spreading it out among multiple baseband and radio vendors in one region,” he told Light Reading during a phone call last month. “I think that proposition is far stronger than building an overlay.”
              In other words, only in unusual circumstances would an operator build its 5G network with someone other than its 4G supplier. This is not to say “swaps” never happen. Huawei gained market share in Europe during the 4G era by offering to replace 2G and 3G networks on generous terms. In today’s 5G market, Ericsson has recently dislodged Huawei in one or two cases through the same kind of 4G largesse. But these changes are now rare. Ericsson’s share of the worldwide market for radio access networks (RANs) rose just 1.2% between 2016 and 2018, according to Dell’Oro, a market research firm. Nokia, despite its well-publicized 5G product difficulties, has seen hardly any of its 4G customers defect to 5G rivals.
               The headline 5G deal numbers, then, merely reflect the companies’ respective 4G positions, with Huawei out in front, Ericsson a close second and Nokia the number three. Indeed, there is a striking correlation between 4G market share data for Europe and the percentage of 5G contracts that vendors claim. Last year, Vodafone CEO Nick Read estimated that Huawei had 28% of Europe’s mobile infrastructure market, with Ericsson on 27% and Nokia on 23%. Out of the 239 5G deals the three vendors boast internationally, Huawei has 38%, Ericsson 34% and Nokia 28%.