Over the past year, Huawei’s ambitions to dominate the global 5G market suffered damage after countries like the U.S., Australia, and New Zealand banned the use of the company’s equipment. Now, one of the largest telecommunications companies in Europe, Vodafone, has halted the use of Huawei equipment in its core networks across the region due to unresolved security concerns.
Avoiding Huawei equipment
“I feel there is a lot of commentary in the media, by politicians and various other bodies and I don’t think everyone is being clear enough and fact based… We are taking this moment to pause Huawei further building the core, only in Europe, while we engage with security agencies, government and Huawei,” Nick Read, Chief Executive of Vodafone, said in a statement (The Guardian).
He added that it would be easy for Vodafone to replace Huawei equipment being used in its core network should there be a need to do so. However, if replacements are to be made for the entire radio access network, then the economic impact of such a decision would be huge. Such a move would delay the implementation of 5G technologies in some countries.
Vodafone is the third largest telecommunication service provider in Europe. Huawei accounts for nearly 40 percent of the telecom equipment market in the region. If Vodafone were to ditch Huawei as their equipment supplier in Europe, it could turn out to be a good decision over the long term. This would deal a big blow to Huawei’s global revenues and its prestige in the international market.
Despite the announcement of a temporary pause, Huawei seems to be taking Vodafone’s decision with caution, without blaming the company for believing in “rumors.” The Chinese company stated that it “is focused on supporting Vodafone’s 5G network rollouts, of which the core is a small proportion… We are grateful to Vodafone for its support of Huawei.” (CNN)
The U.S. has been at the forefront of the international campaign to ban Huawei equipment. After it passed an act that made it illegal to use Huawei products in government departments, Australia and New Zealand also followed up with their own bans on the Chinese equipment manufacturer. President Trump is said to be considering an executive order that would prevent American companies from using Huawei hardware. This distrust of Huawei is understandable when its relationship with the Chinese government becomes clear.
“It’s important to remember that Chinese company relationships with the Chinese government aren’t like private sector company relationships with governments in the West… China’s 2017 National Intelligence Law requires Chinese companies to support, provide assistance and cooperate in China’s national intelligence work, wherever they operate,” William R. Evanina, the Director of America’s National Counterintelligence and Security Center, said to The New York Times.
The U.S. government looks at 5G technology as the newest “arms race,” with China aggressively seeking domination in the market. The winner will inevitably be able to gain military and economic advantage over the next few decades. And Beijing emerging as the winner is the worst possible scenario for the world, as the country’s authoritarian regime might end up inspiring other nations to follow suit. As such, America is pushing allies across Europe and Asia to prevent Huawei from capturing their market.