15.Sep .2020 12:20

Communication Networks: Major Geopolitical Clashes - La Tribune

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This article was first published by La Tribune.

National, international and intercontinental data exchanges and communications are now major economic and strategic issues. These areas have therefore become areas of confrontation, from equipment to networks, including cybersecurity. Some are visible and known, others are the subject of much less exposed combat, but nevertheless major. By Gérard Vespierre, Chairman of Strategic Conseils (*).

The continuous growth in the computing power of machines, the development of artificial intelligence, the "Cloud" and the increase in network speed, have for years created an increasingly vast and communicating digital universe. Businesses and individuals are benefiting from these developments. States have also played their part, taking advantage of these new information processing capacities for their management and their armed forces.

Such a fabric, which has become essential and therefore vital for industry, management and defense, has created a new field of complexity and therefore fragility. Cybersecurity has thus become a major issue. We know it and see it in cyber attacks against companies, institutions, or organized to influence major political processes. While "cyber" operations are a matter of secrecy and shade, battles over communication equipment are being fought in broad daylight.

The iconic battle of equipment, Huawei

The economic and strategic tensions and rivalries between China and the United States have resulted in the field of communications by the battle around the 5G equipment of this Chinese company.

Huawei has been the subject of parliamentary inquiries in the United States since 2012. In 2018, a report to Congress highlighted the firm's progress in the field of patent filings and the deployment of 5G networks. On December 1 of that same year, the founder's daughter, the company's financial director, was arrested in Canada, at the request of a US court. The company is accused by the United States of having violated the embargo on the sale of telecommunications equipment to Iran. In May 2019, the Huawei company was placed on the Department of Commerce's blacklist. This position prohibits American companies, except special dispensation, from trading with it. In May 2020 this ban is extended for 12 months.

The 4 partners of the United States (England, Canada, Australia, New Zealand) within the famous alliance of Anglo-Saxon intelligence services, known as the “5 eyes” were called upon by Washington to make identical decisions.
Last July, England finally followed this direction. London's decision is to stop the supply of Huawei 5G equipment from next year, and to withdraw from service, before the end of 2027, any equipment already in place.

France has also decided to join this strategy. At the end of August, the Bouygues Telecom company decided to withdraw 3,000 Huawei mobile antennas from service. The French government having decided, in a pragmatic way, that there would no longer be, by 2028, any of these branches in areas of very high population density. The company is therefore led to remove this equipment in Strasbourg, Toulouse, Rennes, Brest, cities with military or cybersecurity structures.

But apart from antennas and devices, geopolitical interests are also expressed in networks, in particular that of submarine cables.

The battle of cables

Submarine cables provide more than 95% of intercontinental traffic, and their number continues to increase, with optical fiber replacing copper. The number of these submarine cables is constantly increasing, currently more than 450, representing a network of more than 1.2 billion kilometers. Development is supported, fed by the Internet “majors”, American (GAFAM) and Chinese (BATX).

The "sensitivity" of these networks has been a subject known for a long time, but the materiality of this "sensitivity" is relatively recent.

Russia has for several years shown great curiosity towards Western submarine cables, approaching them with heavy military means. In France, the French Navy has been assigned the mission of protecting them.

China, for its part, considers the development of fiber networks to be crucial support for its “Belt & Road Initiative” strategy. They are also essential to the success of Chinese companies in Europe.

In symmetry with GAFAM, Chinese BATX (Beïdou, Alibaba, Tencent, Xiaomi) are opening their own Data Centers all over the world, by connecting them to their own cables.

This is the meaning of the PEACE (Pakistan and East Africa Connecting Europe) project presented by the Chinese company Hengtong . This 12,000-kilometer submarine cable will link Pakistan to France via Djibouti and Egypt.

Submarine networks therefore play a major strategic role, but we must not forget land networks and the battles that go on there. This is the situation in the South Caucasus.

The strategic Caucasus

The geographical location of the Caucasus is exceptional. This region is the meeting point of Europe, Russia, and the two Asian routes, that of the south, and that of the center.

For the subject which interests us, Georgia is found to be at the center of the cable networks coming from Europe and Asia, while being on the edge of Russia. It is able to receive and be the junction point between the networks of Asia having crossed the Caspian and Azerbaijan, and that coming from Europe via the Black Sea ...! Absolutely strategic!
Any industrial or commercial operation in such a hub is therefore of a very special nature and therefore requires the greatest attention.

However, for more than a year, major operations have been underway, quite far from the spotlight. A battle is truly unfolding.

The battle of the Georgian hub

Since 2008, only one Georgian company has managed the fiber network from Europe across the Black Sea, Caucasus Online.

In 2018, the Azerbaijani group NEQSOL, mainly present in energy, and telecommunications, established from the United States to Ukraine, via England, made the decision to acquire Caucasus Online.
After conducting the necessary contacts with the Georgian government authorities, the operation was finalized in 2019.

NEQSOL proposed to bring the major internet operators to Georgia so that they could establish Data Centers in the heart of this strategic area, like the economic irrigation provided by the Baku pipeline. Tiblissi-Ceyhan ....
The strategic vision was clear, and fully corresponded to the development needs of Georgia and Azerbaijan in the new economy.

But this very clear situation has darkened since July 1 of this year. 

The Georgian government's turnaround

On that date, Georgia's National Communications Commission (GNCC) brought together the country's leading operators. She simply told them that the government would very quickly submit to Parliament new texts concerning "critical infrastructures". These texts were intended to grant additional powers to the GNCC, including the possibility of appointing directors, with extended powers, in telecommunications companies.

A few days later, all the operators countersigned the same text underlining their very deep concern about such a project.

Clearly, this project aims to question the change in shareholder of Caucasus Online, but also to limit access to the internet by decision of the GNCC.

The new text was approved by Parliament, allowing the government to reverse the transfer of the operator. The GNCC has set a deadline of September 20. The motivations of the Georgian government remain obscure. Several hypotheses can be formulated.

Assumptions and consequences

First of all, it is worth noting the violence of the process, both in its method and in its speed. We have the right to be surprised at the part of a state wishing to approach the European Union, and therefore its concern for the law, such an authoritarian and radical practice.

One of the motivations could be the non-acceptance of seeing an industrial group from a neighboring state take control of a national infrastructure, both strategic and sensitive. We are therefore fully here in the geopolitical battle. Large countries do not have the exclusivity of rival issues. Rivalry can also rage between countries of a few million inhabitants, vis-à-vis an infrastructure deemed strategic.

Another explanation would be to consider another Georgian border, that with Russia. Since the war with Georgia in 2008, Russia has penetrated into Georgian territory and secured positions in South Ossetia and Abkhazia. Moscow therefore has levers, and when you have an advantage, it is often tempting to use it. Moscow might wish not to see such strategic networks linking Europe, and two Asian routes to be set up, at its doorstep, but rather within its territory. Russia could thus be tempted to come and disturb the game between Georgia and Azerbaijan, to profit from it in the long term.

Obviously, this situation, of state intervention, calling into question an agreement acquired between two companies, does not give Georgia a favorable image, an image of openness and freedom. However, a situation where confidence and respect for commitments prevail is an absolutely necessary prerequisite to encourage and attract foreign investment on Georgian soil. The difficult economic situation of 2020 and 2021 requires this respect and openness.
Geopolitical rivalries in the field of communication networks are not at their last twist.