Despite the fact that the initial capital outlay that telecommunications giant Huawei is investing in its Malta outfit is rather minimal considering the fact that the company invested a whopping US$5 billion in research and development in 2013, the investment’s potential it is certainly nothing to be scoffed at.
On Tuesday the government and the Chinese telecoms company, the world’s largest, signed a memorandum of understanding that will see the company open an office at SmartCity and begin research and development activities in Malta.
Specifically, the company has agreed to test its avant-garde 5G mobile technology in Malta and in so doing it will seek to rope in a local partner, presumably one of the country’s own telecommunications companies, to test the incredibly promising technology.
Huawei’s Malta office will be a small operation, with just a handful of staff being deployed here, but in today’s day and age, the size of an operation does not, by any means, define its value or its potential.
In fact, when pressed by journalists on Tuesday to quantify the investment, the Prime Minister was correct to have observed that it would be “quite simplistic” to reduce memorandum’s significance into monetary terms.
Huawei is one of the world’s most R&D-intensive companies and some 46% of its 146,000 employees around the world are engaged in R&D. The company also has 21 R&D institutes in countries ranging from China to the US, from the UK to Columbia and from India to Russia.
And this is exactly the direction in which successive governments have been trying, with mixed results, to take the country - into the knowledge economy, in which R&D plays a significant role. This is the area where Malta, given its spatial constraints and its comparatively high wages, can truly excel.
By having chosen Malta to serve as a test bed for the development of its 5G technology, Huawei has also opened up the possibility of the country becoming one of the most technologically-advanced nations on Earth.
With the world’s largest telecommunications company, which also has one of the world’s largest R&D setups, using Malta as a test bed for the world’s newest and potentially redefining communications technology, Malta could very well end up as one of the first countries in the world to have a rolled out 5G telecommunications network.
The test bed concept applies perfectly to Malta: a small country with a small market with a significant thirst for all things ICT.
This is a small investment but the prospect of 5G network eventually being rolled out in Malta before other countries is enormous. As such, it was no coincidence Malta Gaming Authority chairperson Joe Cuschieri was chosen to consult on the deal – Malta’s remote gaming sector stands to gain considerably from a potential advent of 5G technology in the country.
5G technology is meant to open up the still largely fictional ‘internet of things’, in which devices with embedded electronics – from fridges and air conditioners and from heart monitoring implants to cars with built-in sensors - will be able to be controlled or accessed remotely. The opportunities are virtually endless, and if Malta were to be one of the first countries with such a network, the country’s potential is also limitless.
Yes, Malta could potentially become one of the world’s most advanced telecommunications countries, but then again this may all be another pie in the sky. All that has been signed, in reality, was a memorandum of understanding, which, after all, does not exactly bind the Chinese multinational to turn Malta into a showcase for 5G technology. And even if it does, there is absolutely no guarantee that Huawei will be either the frontrunners or the pioneers in the technology’s rollout.
Much remains to be seen of this new Chinese investment but it would be patently unwise to immediately write it off as another case of mere government hyperbole.