An overview: US Wireless Chinese OEM Swaps


If you don’t know by now, the US carriers that have Chinese equipment have to swap it out from something that doesn’t come from a communist country. 

That’s the real issue. It’s the government’s values in China are Communist which means that the government not only is part owner of the company but, in theory, they could have access to the equipment once it’s installed. 

While the smaller carriers have used Huawei and ZTE in the USA, now they are faced with replacing that equipment. 

There are several carriers that went with these OEMs, here’s why.

ZTE and Huawei had very cheap equipment. It was so much less than the big boys, which at the time was Ericsson and Alcatel-Lucent. I remember because Huawei looked so good on paper. They were offering so much for so little that it was hard to compete.

I remember because I was at Alcatel-Lucent at the time. We were seriously worried because it would have destroyed our business. They looked so good on paper that in Canada they took so much business.

Luckily, when they won the business they had tons of problems. They were not as far as they said they were.

With that said, they sent in an army of engineers to fix the problems. They learned everything about the networks and got them working very well. 

Introduction

This is a high-level overview showing the simple steps to do a swap.

In the US carriers are being told that all Chinese networking equipment has to be removed and replaced. It’s not as gentle as, but a requirement that the federal government is handing out to all wireless and wireline providers in the USA.

Regardless of what your opinion is, or mine, this is happening. 

I have some ideas after working with several carriers to put quotes together to build models. I am not saying these are the only ways, only the most common that I have seen. 

What the smaller carriers have several concerns. The list that I see is this.

  • Build a budget, understand the costs
  • Outline the process you intend to use, then align the budget with the process.
  • Understand how the government will hand out the grants to help you swap.
  • Look at each OEM in the USA, assuming you go with one of the big 3, Ericsson, Nokia, and Samsung. Which one can meet your needs and your budget?
  • Build timelines for the cut
  • Understand the timeline for each item and how the migration will happen.
  • Make a decision and build the deployment plan.
  • Execute. 

That’s the high level. Let’s break it down.

These are mostly CCA carriers that wanted the cheapest possible system they could get. The big carriers, Verizon, AT&T, T-Mobile, and Sprint before TMO bought them, all were prohibited from buying Chinese. Sprint tried and was stopped. 

The big 3, Verizon, AT&T, and T-mobile don’t have this problem because they went with Nokia or Ericson or Samsung or a combination. 

What OEMs are being Removed?

Basically, anyone who’s headquartered in China, specifically ZTE and Huawei. They are being forcibly removed from the US carriers on allegations that the communist regime would have a backdoor into the equipment and spy on US citizens. 

They deny it of course. Huawei tried to explain that the communist regime has no part in their company and they call all the shots and the communist government lets them do what they want. I mean, we all believe that, right? Hell, in the US the government tells businesses what to do up to a point. They have their fingers in how we run the business and collect taxes. 

Anyway, privacy is the issue and regardless of what you think, the US government says we have to do it to stay in business. 

Is it anything made in China?

It is any company that is headquartered in China.

To be clear, Nokia and Ericsson have stuff manufactured in China, as does Samsung. It’s so cheap. Just like Qualcomm, Cisco, and almost anything you buy at Walmart. 

Made in China is an expectation. Of course with the trade war more and more will be moving to other countries like VietNam and India.

Then, COVID happened, and that shut down most of the world. Boy, it would have been nice to have something made in the USA, specifically toilet paper, during that mess. 

When does it have to be removed?

While most people are starting in late 2020, I would not expect it to start until 2021. It takes a long time to get the deal together and make a solid plan.

This is not simple, there is a lot to be considered. I’ll explain in the rest of the article. From what I read the carriers will have 2 years to complete the swap.

This sounds like a long time, but as you can see, it will take longer. Planning, testing, deploying, implementing, migrating, and accepting a system like this is no easy task.

It will take a lot of time, money, and manpower. 

One thing that congress may not understand is how much work is going to be involved. It’s not just the OEM and a GC going out and doing all the work. You have to be very naive to think that’s all there is to it. 

I find it interesting when a government official thinks it’s like swapping out your Wi-fi router at home. Especially when it takes government years to do anything. 

Basically, I see this closing in 2024 sometime. Some will be quicker than others.

Why did carriers choose Chinese gear and who could buy it?

Knowing why is easy, they were cheap and you got a lot of money. Don’t understand that? Then go to Walmart and look around. How did Walmart get so big so quickly? 

It’s cheap, they have a great logistics system in place, and they bullied any American made company to make cheaper stuff if they want to move products in Walmart. 

When I was at Alcatel-Lucent, the carriers all looked at Huawei. They were so much cheaper than any other OEM, especially Alcatel-Lucent and Ericsson. 

The Huawei roadmap was so impressive on paper. They offered a quick path to anything you wanted to do. It all looked too good to be true.

Maybe it was. After all, the US companies had to build the model and get the patents. They had tons of R&D into this. Yet, overnight, it appeared that ZTE and Huawei stormed into the market. 

The carriers that chose Huawei and ZTE are probably smaller carriers. Look at the smaller carriers in the CCA.

I don’t want to say who they are. But we know that T-Mobile, Verizon, and AT&T don’t have Chinese gear. 

Technically, that’s not true because even companies from Finland, Sweden, and South Korea have equipment labs and manufacturing in China. 

Chinese workers win either way. 

The thing is, the carriers that went with Huawei and ZTE seemed to be happy with what they had. They liked the support and seemed satisfied with the OEMs from China. So this has nothing to do with the quality of equipment nor the support that they offered. 

They are going to push to get all they can from the non-China OEMs, but they all seemed satisfied. They are only swapping because they have too. At least, this is what I am told.

Is this a good thing or a bad thing?

My opinion here, but the US government is doing this, and committing $1 Billion dollars to do this. They must know something. I mean after all, if they were after any business that peddled “Made in China” gear, most retail would have been shut down a decade ago.

The carriers that have the equipment are angry, they don’t want to make these changes because it’s going to be a lot of money. Even with the federal support. It’s a drop in the bucket. 

The bright side for the carriers is that they can upgrade to 5G and update all of their gear at the same time. They should look at it as an opportunity. It’s forcing them to upgrade to 5G way in advance.

Also, all the FirstNet partners with AT&T, they should be on non-Chinese gear anyway. I am sure the feds look at this and are concerned.

For the GCs and other OEMs, it’s great because it’s more business and work. This is going to be a tremendous amount of work. Think about all the 5G upgrades, the T-Mobile/Sprint consolidation, the Firstnet deployment, and all the normal day to day business.

The tower owners, like American Tower, Crown Castle, and SBI, it’s another win. Site Acquisition, permitting, additional rent, and upgrades help them get a little more money out of the towers they own. 

Construction, tower upgrades, site acquisition, recycling, warehousing, logistics, commissioning, powering, fiber runs backhaul upgrades, and more. All of this is huge. It all adds up to the economic boost that the industry, and quite frankly, the USA, needs in this time of the COVID-19 epidemic. 

Remember that wireless communications, 5G deployment, and wireless connections are critical businesses and will continue in this time of crisis. 

What is the process?

Here is where the carriers are already working out the plans. They are looking at what they have to do. Let me lay it out from a high level.

Planning

  • What will it cost?
  • What is the strategy
  • How aggressive can the schedule really be?
  • How will you migrate?
  • What happens to the old gear?
  • Can anything be reused or does it all go?
  • RAN and microwave

Building the budget

  • Planning and preparation
  • What OEM do you prefer
  • Who can get you to5G cost-effectively
  • Who can meet the roadmap
  • Who is your target customer?
  • Test plans
  • Length of testing
  • Building the schedule

Testing different OEMs

  • In the lab, 
  • Comparing features
  • Retro systems like 3G
  • Adding 5G]roadmaps matter

Looking at the core

  • Functions
  • Migration
  • Starts with the core

Lab and Field Testing (General Acceptance)

  • How long?
  • Feature testing
  • Side by side comparisons
  • What and where
  • Lab to live, MOPs, procedures, and acceptance parameters

Backhaul and Fronthaul

  • Fiber
  • Microwave
  • Upgrades
  • Planning for 5G
  • Requirements and costs

RAN, macro and small cell

  • Installing the RAN
  • Tower and rooftop work
  • New equipment side by side or remove and replace?
  • Schedules
  • Resources
  • Closeout requirements

The cutover

  • Doing the cust
  • Sector by sector
  • Cluster by cluster
  • Systemwide cut

Final acceptance

  • What are you testing?
  • Are you going to retro the 3G or remove it?
  • Will you add 5G at the same time?
  • FirstNet issues
  • Required test results
  • Cluster acceptance requirements

Decommissioning

  • What to do with the old, recycling
  • Where to send the old equipment, need to recycle
  • Don’t try to sell it
  • It’s more than the electronics, like hybrid cable, antennas, microwave, etc.

 

Breaking it down. 

I am working on a more detailed report, but that is not to be published here. If you’re interested, let me know how to purchase it. 

I can recommend companies that can help you deploy. 

Helpful links:

 

 

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