Building next generation communications technology isn't as safe and sedate an effort as some might envision it being. Sometimes there's even controversy afoot, as was recently seen when SK Telecom (News - Alert)—the leading mobile carrier in South Korea—purchased new Long Term Evolution (LTE) equipment from China's Huawei. The deal sparked ire on several fronts, and for different reasons.
The next generation communications equipment SK Telecom purchased included a Digital Unit and Remote Radio Head (DU&RRH), which SK Telecom was planning to test before setting up a full contract with Huawei (News - Alert). Word from industry figures suggests that the chances of SK Telecom going with a full agreement are quite likely, as the quality tests in question are expected to go smoothly. The tests are expected to run about two months, and should this deal go through, it will likely prompt SK Telecom to bring in other Huawei-made materials for augmenting LTE (News - Alert) base station lineups.
In turn, this agreement in next generation communications is sparking controversy on several fronts, mainly focused on potential hacking risk as well as the perceived inability of South Korean firms to compete in this field. Though SK Telecom has been using Chinese parts in some LTE servers for some time now, those servers were also made by Ericsson, Nokia and Samsung (News - Alert), making these more of a multinational effort than a Chinese purchase.
Concerns over Chinese hacking possibility aren't exactly new; going back to 2012, the United States government raised concern over Huawei being a supplier of LG material going in around United States army bases in South Korea. Oddly, reports note, SK Telecom went with Huawei without opening the floor to public bidding, a measure regarded as “unusual” by one source. SK Telecom responded to that report by noting that “nothing has been confirmed yet.”
China's reputation as a hacker precedes it, and that's making some very nervous. Throw in the primary appeal of Chinese goods—low cost—and that, to the suspicious mind, makes it look less like a great new option in next generation communications and more like bait. Given that businesses are drawn to low-cost solutions as a means to lower expenses and thus improve profitability even in periods of flat sales, the end result is that China's materials are attractive, but potentially dangerous given past events.
Is South Korea the target of an unexpected conspiracy? Or are pundits crying wolf? Only time will tell just what the outcome here is, but it's a safe bet that Chinese telecom equipment will continue to be a bone of contention for some time to come.