Korean Mobile Carriers Face Dilemma in Choosing 5G Equipment

With the selection of telecommunication equipment suppliers imminent for commercialization of 5G mobile service, the three Korean mobile carriers -- SK Telecom, KT and LG U+ -- have plenty to ponder over choosing China’s Huawei as their equipment supplier.

The selection of an equipment vendor has become a complex issue due to an escalating trade war between the United States and China and growing security concerns over Chinese products.

According to the telecommunication industry on July 4, LG U+ is leaning toward picking Huawei as its 5G equipment supplier. Yet the company is facing criticism for preferring Huawei. Questions are raised as to whether it is appropriate for a Korean mobile operator to use Chinese equipment that is surrounded by a controversy over information security, given that 5G networks are part of Korea's national backbone telecom network.

According to CVE Details, a security statistics website, Huawei voluntarily reported 52 security vulnerabilities from 2007 to 2015, but the figure shot up to 169 last year. "I am a smartphone subscriber using the network of LG U+. But the LG U+’s use of Huawei equipment will make me nervous and concerned about security matters. I will switch to other mobile carriers," a netizen wrote in an internet message board.

Many netizens note the US government's insistence that US carriers use American equipment due to concerns about a leak of confidential information and secrets. They are critical of Korean mobile carriers for running counter to this trend.

On top of the controversy over information security, the escalating trade war between the United States and China imposes a huge burden on Korean mobile operators for using Huawei equipment.

Last month, the US House of Representatives passed an amendment to the National Defense Authorization Act (NDAA) which was intended to block ZTE and Huawei products from being supplied to the US Department of Defense. The National Telecommunications and Information Administration under the US Department of Commerce advised the Federal Communications Commission (FCC) not to allow China Mobile to enter the US telecommunications market because the Chinese mobile operator threatened national security.

Korean telecom companies cannot help but be affected by the US government's mounting pressure on Chinese IT companies. They could land in serious trouble by purchasing Chinese 5G equipment without taking into these factors.

SK Telecom, KT, and LG U+ were expected to complete their selection of 5G equipment suppliers by the end of July at the earliest, as they were planning to start 5G service in March of next year. However, industry watchers say they may put off the selection of 5G equipment suppliers in consideration of the growing controversy over security and the trade war between the US and China.

"I think that KT and SK Telecom have Huawei equipment on their mind as it is relatively cheap," said an official of the telecom industry. “However, they are aware that US authorities are watching them. So they have chosen to wait and see the outcomes of the US-China trade war for the time being."