House Intelligence Committee Chair Mike Rogers (R-Michigan) says Softbank and Sprint Nextel are telling his committee they will try to phase out Chinese network equipment used by Clearwire. Sprint owns the majority of Clearwire and is trying to buy the rest. The concern about Chinese equipment arises from a recent Congressional warning about potential national security risks. That report named Chinese vendors Huawei and ZTE as possible threats, and Huawei is a supplier of network equipment to Clearwire.
Japan’s Softbank, which is in the process of buying a 70% stake in Sprint Nextel, is also a Huawei customer. According to the Wall Street Journal, Washington may not approve the Softbank-Sprint deal unless the companies promise to notify the government about plannned core network equipment purchases.
Huawei’s equipment is typically less expensive than competing products from other major suppliers, so the Chinese vendor has had some success with smaller U.S. carriers looking for economical network upgrades. Now U.S. security concerns are opening the door for another low-cost supplier. Startup Range Networks, funded by investors who wanted to help bring cellular service to rural areas, competes directly with Huawei in rural markets. The company makes cellular radio access networks based on open source software, and is also providing core network components based on another open source software product. It has deployed 2G networks and is testing 3G and LTE systems. CEO David Burgess said his company’s LTE networks will be deployed this year. He sees a significant opportunity for a new low-cost provider.
“If you’re an American network operator your primary choices right now are going to be Ericsson, Huawei and ZTE,” said Burgess. “Ericsson is fairly expensive and you know you’re going to face some problems potentially with the government if you install Huawei or ZTE equipment. The government has come right out and said ‘Don’t install this stuff.’ So for an American company to step in with a reasonably priced viable product – there’s a huge opportunity there.”
Range Networks said it has shipped about 100 systems so far, about half to government-related private networks, and the other half to small public operators around the world. Burgess said the company’s open source solutions offer a double advantage: lower cost and more security. “Because we can deliver source code to customers we can produce systems that are more trustworthy,” he said. “You know what’s in the system.”
