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Huawei crackdown

Huawei urges carriers to stick with its 5G gear after UK ban

Rotating chairman vows more R&D spending as US crackdown continues

The U.K.'s surprise decision to block Huawei from its 5G network is a blow to the Chinese company.    © AFP/Jiji

TAIPEI -- China's Huawei Technologies on Monday urged global carriers to stick with it and continue buying its networking gear if they want to stay ahead in the 5G race. It is the company's first public comment since the British government made a dramatic U-turn and banned the world's biggest telecom equipment maker from its next-generation network.

"First, carriers should prioritize user experience and spend money where it's needed most to maximize the value of existing networks. ... Carriers should make the most of existing 4G and [fiber communication] networks, and integrate them with new 5G networks through holistic coordination and precise planning," Huawei Rotating Chairman Guo Ping said at the opening of the company's online Better World Summit. "5G deployment plans should prioritize hotspots and key industry applications. This is the only way for carriers to unlock the full potential of 5G."

There are already more than 90 million 5G users worldwide and more than 700,000 5G base stations have been deployed, according to Guo, with the latter number expected to grow to more than 1.5 million by the end of this year. "As global 5G deployment begins to wrap up, we need to strengthen our focus on industry applications. This will help us unleash the full potential of 5G."

Guo's comments show how Huawei is attempting to retain customers by convincing them it is more efficient to use the company's existing 4G kit as a platform for 5G expansion.

He said over the past 30 years Huawei has deployed more than 1,500 networks in more than 170 countries and regions, and has provided smart devices to 600 million users and delivered services to 228 of the Fortune Global 500 companies. "We play a vital role in the global ICT industry. ... We will continue working with our customers and partners to build a robust ecosystem," the rotating chairman added.

Guo's remarks come after the U.K, a key market for Huawei's carrier business, recently decided to ban telecom operators from using the Chinese company's 5G infrastructure and demanded them to phase out its gear from existing networks by 2027. The about-face from the U.K. came after intense pressure from the U.S., which earlier this year ramped up its own crackdown on Huawei.

France is said to have told carriers who plan to buy Huawei's 5G gear that they will not be able to renew their license once they expire, Reuters has reported. Germany, another big market for Huawei, is also heatedly debating the issue. Deutsche Telekom, one of the leading carriers in the European market, said it has a multi-vendor strategy, which includes purchasing a combined of 25% of its technology from European and Chinese vendors. DT said it completed its 5G radio access network contracts with both Ericsson and Huawei.

Singapore's three biggest telecom operators, meanwhile, have picked Ericsson and Nokia over Huawei for 5G infrastructure.

Huawei recently reported a surprisingly robust financial performance for the first half of 2020 despite the U.S. further tightening its export control rules in May. The company managed to grow by 13% on the year in revenue for the first half, with the sales of its carrier business and consumer electronics business both expanding.

Taiwan Semiconductor Manufacturing Co., the world's biggest contract chip manufacturer, said in mid-July it had been unable to take new orders from Huawei since May 15 and would have to ship all the chip products in the production pipeline before Sept. 14 due to the new U.S. rule changes. Almost all of Huawei's in-house designed high-end smartphone and networking processors are produced by TSMC, leaving Huawei to look for alternative suppliers to maintain its supply chain continuity.

"This growth didn't come easy, especially given the complicated environment we are currently in," Guo said. "Going forward, we will continue investing heavily in R&D, and bringing more high-caliber R&D talent on board to keep the innovation coming."

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