5G presents opportunity and risk for American businesses and federal agencies

October 9, 2019
Harris Allgeier

Photo by sarayut from Getty Images Pro

As the long-awaited 5G standard makes its commercial rollout across the country, businesses, and federal agencies are reckoning with matching security, legal, and supply chain concerns. While 5G will ultimately bring significantly faster speeds, it will also exponentially increase avenues for cyber-attack and fuel supply chain concerns. This isn’t just due to faster speeds or the typical unknowns associated with new technology, there’s also significant concern over China’s central role in developing the new network standard.

But why is the world rushing pell-mell into the eye of the 5G storm? What benefits is the technology expected to bring?

Speed & Volume

5G is going to be fast. Like, really, really fast. Possibly 10X as fast as the zippiest 4G connections you’ll find today. It’s also going to move larger quantities of data than ever before, as much as 10 terabytes per kilometer.

Better Coverage (In some areas)

5G is fast but that speed comes at the cost of signal strength. The radio frequencies being used by 5G technology will have a harder time penetrating buildings and deplete over distance much more rapidly. To compensate for this shortfall, network providers are building many more cellular base stations. This should, in in theory, ensure much more even coverage for those in highly urban areas (which are the first targets for any new technology support).

Smart Vehicles and IoT

One of the areas 5G is expected to make the biggest splash in is IoT. The ubiquitous Internet of Things (an umbrella term referring to internet-connected devices outside of cell phones/computers) is about to get a whole lot more internet. The throughput capability of 5G means things like smart cars, intelligent medical equipment, logistics sensors, and whole lot more will be able to send and receive more data and more kinds of data than previously possible. 5G will also support connectivity to devices traveling at 500km per hour, substantially increasing the ability for connectivity-dependent smart-devices in high-speed transit.

5G sounds great! What’s to worry about?

Well, you’ll need to get a new phone to take advantage of the technology, you’re unlikely to realize the benefits any time soon if you live in a rural area and, oh yes, a complex web of international trade disputes and security concerns may make adopting the technology near-impossible for some American businesses.


It’s all about China, mostly. The Chinese government and Chinese firms have a much larger stake in 5G development than they had in 3G and 4G-LTE, having secured greater leadership positions in both the International Telecommunication Union (ITU) and the Third Generation Partnership Project (3GPP).

Chinese entities (specifically Huawei and ZTE) have made large strides in patenting ICT innovations, making China the de-facto industry leader in this technology. Chinese companies account for 34% of global patent applications related to essential 5G technology, a 50% increase compared to their share of 4G patents. China’s dominant 5G position isn’t only reflected in the number of patents they control; they have also played a much greater part in developing the 5G standard: the industry governance approved by the 3GPP that essentially defines what is and isn’t 5G with respect to various technologies. According to IPlytics, Huawei leads the pack on submitted technical contributions to 5G standards, ahead of Ericsson, Nokia, and Qualcomm, with ZTE coming in 5th. Huawei also holds the lead for most approved contributions to the standards.

So, China’s taking the lead. Why is that a problem for me?

Perhaps not you personally, but it certainly presents challenges to American companies and federal agencies looking to leverage the technology. There’s two reasons for that: the ongoing (and seemingly ever-escalating) trade dispute between the two countries and the potential security threat posed by adopting technology dependent on innovations from Chinese companies.

Trade war, you say?

In case you missed it, the American government and the Chinese Government have spent the past year slapping tariffs on one another, with telecommunications equipment being some of the hardest-hit products. The Trump administration has also specifically issued bans on the largest Chinese telecom company, Huawei, prohibiting their products from use in American communications networks and banning US agencies from doing business with Huawei. The landscape is constantly changing though. As recently as September 12th, Huawei’s founder Ren Zhengfei has offered to sell the company’s technology to western buyers with no strings attached, theoretically enabling a buyer to use the technology with assurance that the Chinese government would not be watching.

But is 5G a security risk?

Whether or not China’s investment in 5G constitute a material risk to US security is up for debate. Many officials certainly believe so. According to Ashley Ford, the assistant secretary of state for international security and non-proliferation, “If a Chinese technology giant has access to your technology, your information, or your networks and the party comes asking, the only answer the company can give is ‘Yes.’”

The US government has plenty of legislative tools designed to protect against the insecure use of foreign technology through economic pressure, such as the Buy American Act or ITAR. However, measures like these can only protect against known affiliates of foreign companies. A third or fourth tier supplier with compromising ties to the Chinese government could still slip through if their connections are not reported or well-documented. Organizations looking to capitalize on 5G technology without falling afoul of federal law will have to use tools like intelligent technology to vet their supply chains.

To learn more about the potential pitfalls of pending technologies like 5g or the Internet of Things (IoT) and about potential solutions click here. And check out Interos’ eBook on the subject which discusses measures organizations and agencies can take to protect themselves while making use of emerging technology.

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