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Coronavirus

Huawei and ZTE fight travel bans to reach Mobile World Congress

Virus outbreak leaves Chinese tech companies up in the air for 5G event

The Mobile World Conference in Barcelona is one of the most important events of the year for tech companies like Huawei and ZTE.   © Getty Images

TAIPEI/HONG KONG -- Huawei Technologies, ZTE, Oppo and other Chinese smartphone makers are rushing to ensure their participation in the world's biggest mobile technology event later this month as the coronavirus outbreak triggers travel bans that leave China increasingly isolated.

Oppo and Xiaomi, another smartphone maker, have canceled plans to organize tours for Chinese media as they did in past years at the MWC in Barcelona, four people familiar with the matter said. To make sure other events take place as planned, Huawei, ZTE and Oppo will deploy employees to Barcelona as soon as this week, three people said. Xiaomi will mobilize overseas staff to support the event, according to one person.

"We are still finalizing a lot of details as things change too fast and too dynamic. A lot of things are still subject to change," another source close to Huawei said. "There will definitely be impacts to the tech expo, as 30% of MWC attendants are Chinese," the source said, adding Huawei is not the only Chinese company mulling to adjust their events at MWC.

The coronavirus crisis has left many companies' plans up in the air for the Feb. 24-27 event, which has gained in popularity among Chinese tech groups at the expense of the CES expo in Las Vegas amid the U.S.-China trade war.

"The staff supporting the MWC will have to stay isolated for more than 14 days to make sure their health is good and depart earlier from China," a source at a Chinese smartphone maker told the Nikkei Asian Review. "Some of our staff will leave China as soon as this week for Spain to do the preparation to prevent any transit disruptions."

Some Chinese companies are still holding internal discussions to finalize their executives' schedules and the possibility of changing or scaling back their participation, representatives said.

Goodix, China's biggest maker of fingerprint sensors, often has a big booth at MWC. The company said it will "ask more overseas staff from Europe and the U.S. to support the event" and decide later whether to let Chinese staff attend.

"Some of our clients have canceled some meetings with us," a person at a Chinese chip developer told Nikkei. "Anything could still change, and we face big uncertainties over whether we may have to further dial back some events."

Huawei said that as of Feb. 5 its plans for the MWC have not changed and it hopes to proceed as normal. Oppo said its MWC plans are still on track though it confirmed the cancellation of plans to bring along Chinese media groups.

A spokesperson for ZTE said: "ZTE will still be attending MWC. ZTE employees can only travel from China if they have been symptom-free for two weeks and [they] need to stay self-isolated for another two weeks after they leave China for Spain or other places. They get a health-care check before they leave.

MWC organizer GSMA did not immediately respond to requests for comment, while Xiaomi declined to comment.

GSMA did, however, put out a statement on its website saying it is continuing to monitor and assess the potential impact of the virus on its event in Barcelona, Shanghai and Los Angeles. "The GSMA confirms that there is minimal impact on the event thus far," it added.

The virus has already cost the MWC one major participant, however, with South Korea's LG Electronics becoming the first company to officially pull out this year's event.

"LG Electronics is closely monitoring the situation related to the novel coronavirus outbreak. ... With the safety of its employees, partners and customers foremost in mind, LG has decided to withdraw from exhibiting and participating in MWC 2020 later this month in Barcelona, Spain," the company said in a statement.

The MWC, or Mobile World Congress, takes place every February in Barcelona, drawing around 100,000 visitors and helping set the tone for the year in the telecom and consumer electronics industries.

For Chinese phone and telecom equipment makers, Europe is home to key markets and represents a refuge of sorts from the U.S. attempts to isolate Huawei and its peers over security concerns. Geopolitical tensions dampened Chinese enthusiasm for participating in CES in Las Vegas last month.

This year's MWC comes after the British government decided to allow the use of Huawei equipment in some parts of the U.K.'s 5G infrastructure, despite U.S. objections. The European Union also stopped short of an explicit ban on the Chinese company's technology.

At last year's MWC, Huawei -- the world's second-largest smartphone maker -- introduced the foldable-screen Mate X equipped with 5G capacity, while Xiaomi and ZTE unveiled their first 5G phones.

This time, Huawei is slated to unveil the second generation of its foldable smartphone, the Mate Xs, to prove that its technology rivals that of Samsung Electronics and Apple. The event will help the company market its phones amid headwinds from the loss of Google services like Gmail as a result of a U.S. tech blacklisting. New flagship models from Xiaomi and Oppo are also set to debut in Barcelona.

Yet Chinese companies must now contend with the unexpected pinch of travel restrictions. Italy has suspended visa issuance and barred air traffic from China, while the United Arab Emirates announced a suspension of flights to and from China, except for Beijing. Both moves risk disrupting Chinese attendance at MWC, as Rome and Dubai are among the busiest transit points to Barcelona.

Hong Kong's Cathay Pacific Airways on Tuesday announced plans to cut mainland China flights by 90% over the next two months.

The air traffic disruptions, which some expect will last until May, could go beyond the upcoming MWC to hinder day-to-day innovation by tech companies as some research and development requires joint efforts by businesses inside and outside of China.

"The travel ban has adversely affected our research and development efforts," said an executive at ESWIN, a Beijing-based chipmaker backed by leading display maker BOE Technology. The executive, who requested anonymity as he was not authorized to talk with the media, told Nikkei that the company has no choice but to call off all meetings with tech partners in the U.S., and that some of its American engineers have postponed their return to China amid the coronavirus outbreak.

"Semiconductor development relies on international cooperation, but the problem is that now we cannot go abroad and no one is coming here," the executive said.

Chinese companies' global sales are also at stake. Shenzhen-based Makeblock, a consumer robotics company that sells millions of dollars worth of goods each year to the U.S., Japan and Europe, told Nikkei that most of its international salespeople are stranded in China as a result of the travel restrictions.

The impeded marketing activities, combined with disrupted production caused by factories in China being closed to combat the epidemic, are expected to take a toll on the company's growth this year. While the exact impact remains to be seen, "a lower sales target for 2020 is inevitable," said CEO Jasen Wang.

Other international trade fairs are feeling the effects of the coronavirus outbreak. On Tuesday, 10 Chinese exhibitors withdrew their participation from the upcoming Singapore Airshow, the biggest aerospace event in Asia, after the city-state temporarily shut the door to travelers from China.

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