The Gulf has a 5G conundrum and Open RAN is the key to its tech sovereignty

Long-simmering economic and political tensions between the U.S. and China have continued to spill over into the technology sector, where the two superpowers have made this ever-more vital industry the site of a new Cold War. The acrimony looks poised to only get worse moving forward, potentially leading to what some have characterized as a splintering of the many interdependent nodes of tech manufacturing and development. This tech decoupling, as it’s been dubbed, is progressing slowly but surely, and 5G is at the heart of it. Despite the transition to the Biden administration — and a rare show of bipartisanship — Washington has continued to pressure its allies to exclude Huawei from their developing 5G networks. Some third parties to the dispute have sought to find a way to navigate this divide, trying to hedge their bets between the two sides in a way that maximizes their potential geopolitical and economic returns. This dilemma is particularly acute for the Gulf states, and as they seek to balance their relationships with both Washington and Beijing, several have chosen to stake out their own territory by building an Open Radio Access Network (RAN). This initiative could be a potential solution to the current conundrum that would give states 5G sovereignty in an era of great power competition, with a digital twist. Moreover, the case of 5G in the Gulf may provide key takeaways for observers looking to understand how the issue of tech sovereignty might play out amid the growing U.S.-China divide — both for good and for ill.

The age of “America first”

Like many countries around the world, the Gulf states have faced enormous pressure to side with Washington — the Gulf’s security guarantor and a longtime ally — at the expense of their budding and lucrative relationship with Beijing, their leading trade partner. There were some expectations among U.S. allies that the Biden administration would reverse course on many issues from the stances taken by the Trump administration — chief among them, the U.S.-China tech Cold War. However, this has not come to pass. Instead, the Biden team has maintained Washington’s focus on great power competition with China in the Indo-Pacific, which has now been rebranded as “strategic competition.” Simply put, competition with China is the new post-War on Terror consensus in Washington. Biden prioritized the Quadrilateral Security Dialogue (Quad), completed the withdrawal from Afghanistan, strengthened relations with Taiwan, and formalized the Australia-U.K.-U.S. (AUKUS) security pact. All of these actions point to a U.S. foreign policy that continues to prioritize a traditional conception of U.S. power abroad, and which recognizes technology’s ability to help maintain that power. 5G, a game-changer in the next generation of communications, technology, defense, and beyond, is a case in point.

5G: A geopolitical game-changer

So what is 5G, and why does it matter in the context of this great “decoupling”? Unlike their existing 4G LTE equivalents, 5G networks are much faster and connect many more devices, from self-driving cars to smart cities, and from the metaverse to advanced robotics. The 5G revolution is not limited to civilian activities, however, as 5G networks will also be a game-changer on the battlefield too, improving intelligence, surveillance, and reconnaissance systems and processing, and revolutionizing command and control. Commercial deployment of 5G networks first began in 2018, but it’s still in the early stages.

Why the fight over 5G?

Technology is one of China’s leading tools of global influence, from 5G to drones and smart cities to cloud computing. Beijing aims to position itself as a major player in global geopolitics and geo-economics, without having to rely as extensively on a more traditional military footprint. Unsurprisingly, the 5G network is at the heart of China’s geo-tech strategic posture worldwide. Washington's primary fear is that Beijing could leverage a dominant position in global 5G infrastructure and standards to enable Huawei to construct a China-centered tech ecosystem, with the goal of China becoming the dominant force in tech infrastructure, software, and talent, and using its tech power to advance its geopolitical and geoeconomic interests. This would ultimately alter the balance of power between the United States and China and divide the world between two rival geo-tech camps.

How far ahead is China?

Currently, China’s Huawei is the frontrunner in the race to deliver 5G equipment worldwide. Huawei has the most 5G standard critical patents at 1,529, followed by Nokia of Finland with 1,397. Huawei’s dominance over the 5G domain extends beyond the critical patents to include 5G standards. In the global discussions surrounding these standards, Huawei has proposed 11,423 5G standards, putting the company far ahead of its Western competitors such as Qualcomm, which has proposed 4,493. Part of the reason for this success is Huawei’s ample budget and large workforce for research and development (R&D). By the end of 2020, Huawei had dedicated 105,000 employees to R&D along with investment totaling 15.3% of its revenue. In the 5G race, Huawei's massive investments in R&D, human talent, and key patents put it well ahead of leading Western firms, like Nokia, Ericson, and others, which have played a relatively smaller part in the development and rollout of 5G networks.

Huawei’s 5G influence in the Gulf

Gulf nations — most notably the UAE, Qatar, and Saudi Arabia — have been directing vast resources toward digitizing their economic and physical infrastructure in preparation for post-carbon economic realities. Based on cost-benefit analysis of its offerings, Huawei has emerged as a key strategic tech partner for many Gulf states as they work to achieve their tech development objectives, mainly rolling out 5G to their respective nations. Saudi Arabia’s Vision 2030, for example, aims at transforming the kingdom into the region’s digital hub. Under this framework, Riyadh prioritized a quick rollout of 5G services.

By October 2019, Saudi Arabia’s Zain joined forces with Huawei to introduce the first phase of its 5G network, which covered 20 cities in the kingdom. In preparation for hosting Expo 2020 (delayed to 2021 as a result of the COVID-19 pandemic) and consolidating its position as a tech powerhouse in the Middle East, the UAE also aimed at rolling out its 5G network at a quick pace. The UAE’s two major network operators, du and Etisalat, established partnerships with Huawei for the deployment of 5G, helping to normalize 5G as a backbone of consumer communications technologies. By October 2021, Etisalat had successfully completed the first end-to-end 5G standalone call in the MENA region. In 2022, the global spotlight will shift to Qatar, host of the FIFA World Cup, which represents a significant milestone as the first time the event has been held in the Middle East. The 2022 World Cup will bring around 1.7 million visitors to Qatar, which is itself a small nation of 2.7 million people. To make it the first 5G World Cup with services such as 8K live broadcasts and augmented and virtual reality, Qatar’s Vodafone partnered with Huawei, while the country’s other carrier, Ooredoo, partnered with Ericsson and Nokia.

Trump’s 5G Cold War

Under the Trump administration, Washington stepped up its counter-Huawei campaign with the introduction of the Clean Network Initiative (CNI). For instance, the U.K. prohibited companies from purchasing new Huawei equipment by law and mandated that current Huawei equipment be removed by 2027. The U.S. pressure and penalties on Huawei influenced the U.K.'s decision, but it was also a reaction to China's forceful measures on a variety of fronts, most notably the new security law introduced in Hong Kong. The Trump administration lobbied European allies to join the CNI, including the Czech Republic, Poland, Sweden, and Estonia, where they aligned on excluding Huawei from their 5G networks. The administration's efforts against the Chinese tech giant extended far beyond Europe and it pressured other allies, such as Israel, to follow suit and exclude Huawei from their 5G networks as well. In Brazil, Washington pledged $1 billion to finance Brazilian telecoms companies' purchases of 5G equipment from Huawei's competitors; however, the status of this pledge is now in question. In addition to 5G, the administration blacklisted Huawei and curbed its ability to gain access to U.S. technology, which ultimately resulted in the Chinese conglomerate reporting its biggest-ever revenue drop in the first half of 2021.

Biden: The race to 6G begins

Since taking office in 2021, the Biden administration has appeared to maintain the same pressure on the issue of 5G. In his first meeting with then-Japanese Prime Minister Yoshihide Suga, for example, President Biden committed to working jointly on the development of 5G technologies to compete with China’s dominance in 5G globally. This was an early indication that Biden would continue to work strenuously with U.S. allies and partners to counter China’s growing reach in this arena. Additionally, the two leaders pledged to work on the development of 6G technology, which represents the next frontier of networked devices and computing. The alignment of interests on 5G network technology was also a major item on the Quad’s agenda. In their first face-to-face meeting under President Biden, the group’s leaders — representing Australia, India, Japan, and the U.S. — notably committed to cooperation on emerging strategic technologies such as semiconductors and 5G networks.

Then came the Open RAN

The 5G network issue has been framed as a zero-sum competition between a Washington-aligned techno-bloc and a Beijing-aligned one, with no ground in between. This zero-sum approach to emerging technologies created the impetus for establishing a middle road for 5G networks, the Open RAN, which represents a solution for middle powers that want to walk a delicate line between the United States and China. Since it failed to present its allies with 5G alternatives to Huawei, Washington is also a clear winner from the emergence of Open RAN.

Open RAN: What’s the significance?

RAN is — in simple terms — an integral component of the telecommunications ecosystem that utilizes radio transceivers to connect individual devices such as telephones and computers to the network. The typical RAN market offering is a mainly closed ecosystem that doesn’t provide telecoms companies with the digital autonomy to diversify their 5G network suppliers and avoid being beholden to one techno-bloc or another. This created a need for a more diversified RAN ecosystem that would allow telecoms companies to pick and choose based on their technological needs, cost-benefit analysis, and geopolitical realities. In an Open RAN ecosystem, the RAN will be built on opening the protocols and interfaces between the major components of the network. By opening up the 5G ecosystem, Open RAN provides telecoms operators with more options, brings more vendors into the 5G market, and stimulates innovation.

The Gulf’s Open RAN gambit

The Gulf has a 5G conundrum. On one side, Washington is its primary security guarantor, and on the other side, Beijing is its leading trade partner and energy importer. In an effort to strike a balance, the Gulf maintained its cooperation with Huawei as an expression of strategic autonomy from Washington despite the U.S.-led campaign against the Chinese conglomerate and the related geopolitical considerations. Moving forward, however, Saudi Arabia and the UAE are also investing in a collective effort to adopt Open RAN technology in their national networks. With the support of five telecoms operators — Zain, Mobily, and STC from Saudi Arabia, and Etisalat and du from the UAE — the Gulf Open RAN initiative focuses on building agile 4G and 5G networks by adopting open interface, software, and hardware that allows telecoms companies to diversify their supply chains, with the aim of reducing their exposure to the geopolitical tensions from the ongoing Cold War between Beijing and Washington.

These Gulf telecoms network initiatives have made no secret of their larger ambitions and intentions. Haitham Alfaraj, STC’s senior VP of technology and operations, stated in a press release last July, “Today’s [Open RAN] announcement signals the entry into a new era of operators’ collaboration in the Middle East to accelerate the development of open network technologies, which helps in diversifying our strategic technology growth.” Hatem Bamatraf, Etisalat’s CTO, said, “This is an extraordinary opportunity for the Middle East operators to come together to promote the development of an open technology that will help to enhance the flexibility and efficiency of our networks.”

The rising middle powers’ tech moment

In addition to a desire to balance between Beijing and Washington and avoid being caught in the middle of this intensifying Cold War, the Gulf and other rising non-Western middle powers were also terrified by the successful U.S. campaign against Huawei. The campaign against the Chinese tech giant, along with American efforts to choke China's semiconductors industry, represented — and continues to represent — the peak of the United States' global technological and geopolitical power that makes Washington capable of disrupting or cutting off the supply chain of its geopolitical rivals. The Gulf investment in Open RAN could be seen as an effort by wealthy non-Western U.S. partners to secure a quasi-independent role on the global stage. To achieve this objective, the Gulf wants and needs strategic tech sovereignty that makes it capable of avoiding the wrath of Washington if it decides in the future not to follow the U.S. lead on strategic issues, especially ones that involve China and the tech Cold War. The potential success of Open RAN might also open the door for greater tech strategic autonomy for the Gulf in the longer term.

Conclusion

From a U.S. perspective, the campaign against Huawei has proven successful in preventing China from dominating the 5G marketplace; however, it also highlighted the need for a much more diversified 5G ecosystem that allows rising wealthy middle powers — the Gulf in this case — to maintain their tech sovereignty independent of the growing tensions and complex dynamics between the U.S. and China.

The Gulf is at the heart of the new tech Cold War, torn between Washington, its primary security guarantor, and Beijing, its leading trade partner and energy importer. This dynamic is unlikely to change anytime soon and the tensions will likely only get worse going forward. To resolve this strategic dilemma, the Gulf is pivoting toward a more expensive, sovereignty-first approach to 5G network technologies. Building an Open RAN initiative could be a solution to the Gulf’s current conundrum and ultimately provide it with 5G sovereignty in an era of great power competition. It remains to be seen what this will mean for foreign policy in a world where untested relationships and new alliances built on technology are the ruling force — and observers should watch closely to see how 5G might be a bellwether for what’s next.

Mohammed Soliman is a Non-Resident Scholar with MEI's Cyber and Egypt programs and a Senior Associate at McLarty Associates’ Middle East and North Africa Practice. His work focuses on the intersection of technology, geopolitics, and business in MENA. The views expressed in this piece are his own.

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