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The U.S. is pushing other countries to stop using Huawei — but it’s going to be a tough sell

"European operators are already hugely dependent on Huawei network equipment."

by David Gilbert
Nov 23 2018, 1:21pm

Reuters

The U.S. government is trying to dissuade international allies from using Chinese tech giant Huawei to build out their next-generation 5G mobile networks over security concerns, the Wall Street Journal reported Thursday.

Experts say it’s going to be a tough sell.

U.S. officials have reportedly briefed their government counterparts and telecom executives in friendly countries, including Germany, Italy, and Japan, where Huawei equipment is already in wide use.

The U.S. is also preparing to offer additional financial aid for telecommunications development in countries that shun Chinese-made equipment, according to The Journal.

Huawei has long been a boogeyman in the U.S. Congress. Earlier this year the NSA, FBI, and CIA all warned consumers not to buy electronics from the company over potential “backdoors” that would allow the Chinese government to spy on American users.

But the U.S. government has yet to provide any evidence of its allegations, and Huawei and the Chinese government have always denied any collusion.

“Huawei is surprised by the behaviors the U.S. government detailed in this article,” the company said in statement. “If a government’s behavior extends beyond its jurisdiction, such activity should not be encouraged.”

As well as being one of the world’s biggest smartphone makers, Huawei is the global leader in the manufacture and provision of mobile phone and internet networks.

Many countries are currently planning for the next generation of mobile technology — known as 5G — and Huawei has positioned itself as a market leader, offering highly competitive pricing and cutting-edge technology.

“Huawei is in a unique position to challenge rivals on technology as well as cost,” Neil Shah, a telecoms analyst with CounterPoint Research, told VICE News. “Huawei is one of the key contributors for 5G architecture and standards. It will be not easy for some governments to ignore its IP contribution and growing clout in the wireless space.”

Shah says vendors are looking less at security and more at costs when it comes to deploying 5G networks, which will cost up to eight times as much as current 4G networks.

The rollout of 5G technology will enable the connection of billions more smart devices to the internet, act as a replacement for home broadband, and even help usher in the era of driverless cars.

In the U.S., Verizon and AT&T are leading the way with 5G rollout, with both operators running the new technology in some cities by the end of this year.

Huawei has been working on 5G technology for more than a decade and has invested heavily in its development. The company spent $800 million on 5G in 2018 alone, placing huge pressure its rivals Nokia and Ericsson to keep up.

The investment, allied to the company’s huge scale, means it’ll be difficult for the U.S. government to undermine its market position.

As of 2016, Huawei claimed to supply more than half of the world’s 537 4G networks and two-thirds of the more advanced 4.5G networks.

In some countries, deals will already have been made for 5G networking — so U.S. officials may be wasting their time.

Huawei had already signed 25 Memorandums of Understanding with telecom operators to trial 5G equipment, including Germany, France, and Canada, Reuters reported in February.

READ: Facebook shared data with a Chinese company that U.S. intel calls a national security threat

“Many European operators are already hugely dependent on Huawei network equipment for their current networks and are working closely with them on planned 5G rollouts. It seems unlikely they will want to change that situation anytime soon,” Ben Wood, a mobile industry analyst at CCS Insight, told VICE News.

And it’s not just in developed countries where Huawei’s footprint is growing.

A recent report from Freedom House revealed Huawei’s spread across Asia and Africa where, along with compatriot ZTE, it's building the backbone of the regions’ internet network.

“Huawei is building Latin America’s largest public Wi-Fi network in Mexico, Bangladesh’s 5G mobile network, and Cambodia’s 4.5G service, and is advising the Kenyan government on its “master plan” for information and communication technologies,” the report said.

However, some countries could follow the U.S.' lead. Senior German officials were planning a last-ditch effort to convince the government to exclude Chinese firms such as Huawei from building the country’s 5G infrastructure, Reuters reported earlier this month.

Cover image: A woman stands at the booth of Huawei featuring 5G technology at the PT Expo in Beijing, China September 28, 2018. (REUTERS/Stringer)

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