Qualcomm’s Efforts to Preserve Monopoly Hinders Rollout of 5G in U.S.

There’s reason to fear the U.S. is falling way behind China, a chief international competitor, in the race to commercialize 5G technology.

While the U.S. was once the leader in wireless services, a new Deloitte study finds China moving quickly to buildout its “next generation” wireless broadband services (5G). That competitive lead will give an edge to those countries in terms of technological innovation and applications development.

Part of the problem with the U.S. is the glacier pace of regulatory approval to build the many 5G cells needed to provide ubiquitous service. While it takes as little as an hour to install a small cell site, it can take more than a year to get government approval in the U.S. and only a couple of weeks for approval in China.

“China and other countries may be creating a 5G tsunami, making it near impossible to catch up,” Deloitte stated in the report. Their findings are consistent with an earlier report.

Another Problem: Catching Up

Regulations aside, China’s potential lead is not the only factor that could derail timely deployment in the U.S. – and policymakers should take notice.

An ongoing patent dispute playing out before the International Trade Commission (ITC) between Qualcomm and Apple also threatens to erode America’s international competitiveness in 5G. Qualcomm, one of the largest manufacturers of cellular chips in the world, claims that some functions of Apple’s smartphones equipped with chips from Intel infringe on its patents.

Qualcomm has asked the ITC to ban imports of iPhones that contain Intel chips.

This kind of corporate legal battle—whatever the merits—will affect the race to 5G.

If the ITC finds Apple at fault, Qualcomm will have the green light to continue its practices like banning iPhones with Intel chips from being sold in the U.S.

Were Qualcomm able to continue its potential anticompetitive approach, smartphone manufacturers would have no choice but to purchase their chips from Qualcomm. This could trigger severe disruptions in the smartphone market, creating a shortage of iPhones and ultimately delaying consumer access to 5G. If that happens, there will be an $8 billion drop hit on consumer pocketbooks.

In turn, this would weaken Intel’s market position – a big problem in the context of the global race to 5G because, like Qualcomm, Intel is working hard to develop 5G modems. A ban on chips could disincentivize the company from continuing to invest in that technology and impede 5G innovation.

Collaboration and Competition

In its report, Deloitte highlighted the importance of collaboration between mobile carriers and other partners to help accelerate the deployment of 5G.

“Policy makers, carriers, and industries with the most at stake should move now to help streamline policies and processes and collaborate with ecosystem players to help create efficient solutions to investment barriers,” Deloitte’s report said.

Qualcomm’s effort to preserve its monopoly is at odds with the very kind of cooperation required if the U.S. is to lead the world into the next generation of connectivity.

American leadership in the race to 5G is already at risk.

A Qualcomm victory at the ITC would only further undermine U.S. leadership at the cusp of a new era in technology.

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