Visitors are seen at a Huawei stand during the 2017 Mobile World Congress. Photo: Reuters

The Donald Trump administration is reported to be in talks with private companies to build a secure 5G network and rent out access to domestic telecom carriers due to concerns about Chinese firms and risks to cybersecurity, Bloomberg revealed on Monday, citing two anonymous US administration officials familiar with the plans.

Talks are preliminary and key decisions on funding and control have not been reached, although Washington allegedly wants a decision on such a state-led telecom network by the end of September and to build it over the next few years, probably by the end of Trump’s first term.

US news outlet Axios has said it obtained sensitive documents that reveal national security officials are thinking of a federal takeover of part of the nation’s mobile network to fend off possible infiltration by China. They indicate US concern that Chinese contractors could have closed-door dealings with the People’s Liberation Army, which is seen as the “dominant malicious actor in the information domain”.

Washington has had contact with local, European and Asian companies such as Nokia Oyj and Ericsson but no Chinese firms, according to one official.

Chinese giant Huawei’s deal with AT&T to market the former’s smartphones and other gadgets collapsed at the end of 2017. Photo: iStock

Analysts say Washington has to give importance to the security of its 5G networks as it will be key infrastructure for a plethora of applications such as virtual reality and artificial intelligence.

Yet Reuters reported on Monday that the local option is still being debated at a low level within the Trump administration.

A host of thorny issues remain to be sorted out; even the idea of a state-backed, infiltration-proof network feeds into populist sentiments prone to being stirred up in US society.

If the US opts for one secure network rather than multiple systems, the key is funding and ownership – what portion of the project would be taxpayer-funded, and whether it would be owned by the government, a private consortium or some combination of public and private entities, the agency quoted a government source as saying.

Washington would face questions and resistance if it decides to put money into a commercial network, which would be a drastic departure from the market-oriented approach given most governments auction licenses or network bandwidths to prospective operators.

Some US carriers, such as Verizon Communications, that have already planned procurement and investment for the next-generation networks, 5G towers and peripheral devices towards the anticipated 2020 rollout, may also be up in arms.

Visitors pass a ZTE stand at the Mobile World Congress, where the Chinese telecoms giant unveiled what it says is the world’s first 5G smartphone, with 360-degree virtual reality and ‘ultra-fast’ downloads for streaming movies and TV to phones. Photo: AFP

US lawmakers have voiced concern about the growing clout of Huawei and ZTE, the Shenzhen-based juggernauts which have expanded their tentacles into the US networks with legions of soft switches, servers and network protocol systems they market in the country.

On Tuesday, Global Times, the Beijing-based nationalist tabloid that is a sister publication of the party mouthpiece People’s Daily, rushed to downplay the impact of the rumored US move to shut out Chinese telecom suppliers. It ran an op-ed saying the question about whether Chinese firms can dominate this next-generation mobile technology depends solely on whether they can take a lead in the race for a unified 5G standard.

China paid hefty costs because its indigenous 3G and 4G network protocols were incompatible with internationally adopted ones. So, it was imperative to establish a worldwide 5G standard to move up the global value chain and ensure an upper hand in competition, the article said.

Huawei, Intel and Deutsche Telekom announced the completion last week of the world’s first 5G interoperability test. Photo: Huawei

But the paper still decried Washington’s “hysteria and protectionism” under the veil of national security.

Meanwhile, the telecom giants are pushing on. Europe’s first 5G beta network has been up and running in Berlin since September last year, backed by a joint venture between Huawei and Deutsche Telekom.

And Huawei completed 5G core network technical verification testing at China Mobile’s Research Institute earlier this month.

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