As the world races for 5G technology, Asia seems to be becoming the internet king of the world. No, we are not talking about Huawei or other Chinese tech majors. We are talking about two prominent tech/telecom giants- India’s Reliance Jio and Japan’s Rakuten. With non-Chinese firms leading the race, this could well an Asian century minus China.
Both Jio and Rakuten are some of the few telecos that can boast of being completely free from Chinese equipment as far as the 5G technology is concerned. In an era in which the free world in general and the United States in particular wants to protect itself from Chinese influence, indigenous technology in itself is the biggest advantage. Even otherwise, Jio and Rakuten have made some giant strides in 5G technology.
As far as Jio is concerned, the Reliance Industries Limited (RIL) Chairman Mukesh Ambani has announced, “Jio has designed and developed a complete 5G solution from scratch. It will be ready for trials as soon as 5G spectrum is available and can be ready for field deployment next year.”
Jio has been pitching itself as an indigenous, safe 5G network for quite some time. Earlier this year, when the US President Donald Trump asked Reliance Industries chairman Mukesh Ambani about the 5G plans, Ambani proudly announced, “We’re going to do 5G. We are the only network in the world that doesn’t have a single Chinese component.” To this, Donald Trump said, “Oh that’s good. Put a bid in.”
The rise of Rakuten Mobile has been equally phenomenal. The Japanese tech giant wants to revolutionise 5G technology. It has already commenced 4G services at about half the prices charged by its rivals in Japan. Rakuten also wanted to kickstart its 5G services, but the rollout got delayed owing to the Coronavirus Pandemic.
In May, it was reported that the COVID-19 outbreak impacted Rakuten’s global supply chain, and the introduction of its 5G technology stood delayed until at least September.
Anyhow, both Jio and Rakuten seem rather confident about becoming some of the first companies to launch the 5G technology. In fact, the strategies of the two companies bear strong resemblance. Both of them rely upon the “open” Radio Access Network (RAN) technology aimed at cutting network-related costs.
In an “open” RAN system, hardware components and software code are decoupled as opposed to a traditional RAN system. As a result, an “open” RAN allows an interface that promises greater interoperability and more competition. It is not necessary that all the equipment should come from a single supplier.
Moreover, both Rakuten and Jio have collaborated with American tech companies like Cisco, Airspan and Mavenir.
This is the reason why both Rakuten and Jio could end up becoming strong players in the world market. Trump is desperate for a Huawei alternative. But the American companies are nowhere near becoming 5G tech giants and Trump cannot wait for them. If the US doesn’t choose an alternative soon, it will lag far behind in the 5G sector.
There is no better deal for the US markets than Jio and Rakuten. Not only are they ‘clean telecos’- free of Chinese influence, but they also offer extensive partnership with American companies. This is the closest that the US President can come to ‘Buy American’ in the 5G sector.
As for the Asian markets, there is more and more stress on home-grown/safe technology. Two European companies- Finland-based Nokia and Sweden-based Ericsson have resurrected in wake of the global outrage against China’s largest private company, Huawei. However, neither of them offers much promise.
Nokia and Ericsson are not big enough to satisfy the Asian markets, nor are they free from Chinese influence. Both of them are believed to be sourcing components from China. In 2019, the head of government’s 5G panel had told ET, “I am not sure technology from European companies has lesser security problems, than say, a Huawei,” while underscoring that only a locally produced technology can ensure complete infrastructure safety.
Even beyond 5G technology, Jio and Rakuten have some grand plans that can make them next-gen internet kings.
Rakuten is an e-commerce giant which also wants to become a telecom major with the launch of its 5G technology. On the other hand, Jio is a telecom major that has also partnered with Facebook and also plants to enter the e-commerce market through Jio Mart– Jio’s new commerce platform to connect with 3 crore Kirana (retail stores) in the country through WhatsApp.
Rakuten and Jio could thus emerge as next-gen tech giants which exploit the intersection of data, e-commerce and telecom sectors, if they win the 5G race. Both these companies are capitalising upon the thin-line difference between the e-commerce sector, telecom and the internet business.
Till not very long ago, the US was the tech king of the world. It had the biggest of tech majors like Google, Facebook and Microsoft. But they have failed to lead in 5G technology. Jio and Rakuten could however become the only companies in the world that have a firm grip on e-commerce, telecom and the internet business. This could, in turn, make Asia the new tech king.