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Huawei crackdown

Asian carriers step away from new Huawei smartphones

Japan's SoftBank, Taiwan's Chunghwa and South Korea's KT review sales plans

Huawei Technologies introduces its P30 Lite to Japan during an event in Tokyo on May 21, a day before Japanese carriers KDDI and SoftBank said they will delay sales of the model. (Photo by Rie Ishii)

TOKYO/TAIPEI/SEOUL -- Carriers in Japan and Taiwan have become the first in Asia to say they will not sell Huawei Technologies' new smartphones in the wake of U.S. restrictions, with a South Korean peer saying it may follow suit.

The news comes as a blow to Huawei's global ambitions just as the Chinese tech giant regained its position as the world's second-biggest smartphone maker.

Meanwhile carriers in several other markets have said they have no plans to postpone sales of the new models after receiving reassurance from Huawei that the devices will not be affected by the U.S. crackdown.

Japan's SoftBank Corp. will not begin selling P30 lite smartphones on Friday as planned, while KDDI is delaying sales of the premium handset, originally due at the end this month.

Taiwan's state-owned Chunghwa Telecom, the island's largest telecom operator, told the Nikkei Asian Review that it would "halt buying new Huawei devices for sale as of now," though it would continue selling existing models already on its shelves.

Taiwan's second-largest telecom operator, Taiwan Mobile, late on Wednesday joined the ranks of carriers turning away from the Chinese smartphone maker: "We will continue to sell existing Huawei smartphones. But, we will not sell new Huawei smartphones, given that those would not be supported by Google's services."

South Korea's KT said it is considering halting sales of new Huawei smartphones and tablets. KT currently sells the Be Y3, a Korean version of the P20 lite phone, and Be Y Pad2, Korean version of MediaPad M3. Telkomsel, the largest mobile operator in Indonesia, also said it is "reviewing the situation."

The cautious approach to selling new Huawei smartphone models comes after the U.S. put the company on its so-called Entity List on Friday, which requires American suppliers to obtain a license to export to Huawei. Google said it is "complying" with the restrictions, raising questions over whether Huawei devices can continue to run on the Android operating system.

The U.S. has since eased its stance by allowing U.S. companies to do business with Huawei for 90 days. Nevertheless, Huawei is reportedly preparing to release its own operating system as early as this fall.

A SoftBank spokesman said it is "checking whether we can sell [the P30] with confidence to consumers" amid uncertainty over whether Google's Android operating system will run on the device.

"We are checking the extent of the impact [of the U.S. ban]," including the availability of software updates and applications, said a KDDI spokesperson.

NTT Docomo, Japan's largest carrier, said it has stopped taking advance orders for the P30 Pro, which it began on May 16. There has been no change in plans to sell the handset later this summer, the company said.

The mobile unit of Japanese e-commerce company Rakuten announced on Wednesday that it, too, will delay sales of the P30 lite, which had been scheduled to start Friday. 

Huawei's Japanese unit did not immediately respond to a request for comment.

In Europe, meanwhile, two of Britain's largest mobile phone operators have also decided to drop Huawei phones from their 5G services, according to a report by the Financial Times. EE had planned to include the Chinese company's phones in services to be launched on Wednesday, while Vodafone UK had planned for a summer release.

Sales in Huawei's consumer business, which includes smartphones, surged 45% in 2018 and became the biggest contributor to the company's 721.2 billion yuan ($105.2 billion) in revenue. Huawei has been aggressively expanding its smartphone business amid pressure from the U.S. on its allies to shut Huawei out of their 5G networks over security concerns.

Huawei has made consumer electronics a key feature of its strategy this year, announcing plans to become a top PC maker in five years, among other things.

The announcement by the Japanese carriers came just a day after Huawei said in Tokyo it would launch its P30 lineup in the country on Friday.

"The postponement of sales will have a significant negative impact on Huawei [in Japan]," said Hideaki Yokota, senior vice president at MM Research Institute, a Tokyo-based research company.

He added that Huawei's smartphone shipments in Japan rose 63.4% last year "because the three major carriers started selling Huawei smartphones from 2018."

At the same time, many other carriers across Southeast Asia and Australia said they were continuing to sell Huawei devices as of Wednesday, with some saying the company had assured them that its smartphones will continue to operate normally.

Thailand's leading mobile operator Advanced Info Services, or AIS, said: "AIS, as a distributor, received an official confirmation from Huawei that current smartphones can still operate as usual. This includes software and Google applications."

Philippines' Globe Telecom and PLDT were still offering P30 for their postpaid plans as of Wednesday, according to their websites. "We are working closely with Huawei to address concerns regarding future firmware and software updates for phones, pocket Wifi units, and other devices," said Ramon Isberto, head of Public Affairs at PLDT.

The two biggest mobile phone retailers in Vietnam, The Gioi Di Dong, and FPT Retail, said Huawei products are still available on their shops.

Huawei on Wednesday moved to avert a loss of confidence in its products. "The U.S. actions involving Google will not impact consumers with a Huawei smartphone or tablet or those that are planning to buy a Huawei device in the near future from an Australian retail outlet," said Jeremy Mitchell, Director of Corporate Affairs at Huawei Australia.

"We will continue to prioritize the development and use of the Android ecosystem."

Nikkei staff writers Akane Okutsu, Nana Shibata, Masayuki Yuda, Cliff Venzon, Shotaro Tani, Fumi Matsumoto and Lauly Li contributed to this story.

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