Some telecom professionals believe that Germany’s Deutsche Telekom and Japan’s SoftBank decided to remove Huawei network from their operations in their domestic markets under the influence of United States.
The game is clear for them. Deutsche Telekom and SoftBank need the approval from United States to merge their American operations. T-Mobile US and Sprint is still waiting for okay from the US regulator for their $26 billion merger to become a strong third largest operator behind AT&T and Verizon.
The believe among telecom industry heads is growing strong because only US allies have started talking against Huawei, the largest telecom network supplier with a commanding market share of 28 percent.
Telecom operators in US friendly countries such as Australia, Germany, the UK, France and Japan – in addition to US — have made negative comments about 5G network supply from Huawei.
Major emerging telecom markets such as India, Russia, Indonesia, Malaysia, among others, have not come forward and made any public any statement publicly about Huawei, the $92 billion plus revenue company.
Like all major U.S. wireless carriers, T-Mobile and Sprint do not use Huawei equipment, but their majority owners, Germany’s Deutsche Telekom AG and Japan’s SoftBank Group Ltd, respectively, use some Huawei gear in overseas markets.
U.S. government officials are pressuring Deutsche Telekom to stop using Huawei equipment, and the companies believed they had to comply before a U.S. national security panel would let them move forward on their deal, a Reuters report said
Removal of existing 4G equipment from their mobile network will be a time consuming and expensive initiative for telecom operators. Some leading telecom service providers have already started spending on 5G-ready 4G network from Huawei. Some telecoms are spending on fixed and fixed wireless infrastructure to support their 5G business.
It will be more costly for mobile operators to choose Ericsson and Nokia because Huawei is the cost-effective network supplier. If the world’s telecom network is going to be dominated by Ericsson and Nokia, telecoms will lose their negotiation power, they believe.
Huawei spends billions on innovation and won several innovation awards in the recent past. Huawei has also grabbed several patents. Mobile operators cannot miss Huawei network due to pressure from the Donald Trump administration.
The U.S. government and its allies have stepped up pressure on Huawei over concerns that the company is effectively controlled by the Chinese state and its network equipment may contain back doors that could enable cyber espionage, Reuters reported.
Earlier this month Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, was arrested in Canada on a U.S. extradition request.
U.S. prosecutors have accused her of misleading multinational banks about Huawei’s control of a company operating in Iran. China has asked for her release. Canada has already offered her bail. But the trade related tensions among US, Canada and China is growing.
Last March, Trump blocked chip maker Broadcom’s attempted $120 billion takeover of US-based semiconductor major Qualcomm over concerns the deal could boost Huawei’s competitive position. Donald Trump and his team believed that Huawei may be supporting Broadcom.
ZTE, another leading telecom network supplier based in China, was crippled in April when the United States banned American firms from selling it parts, saying the company broke an agreement to discipline executives who had conspired to evade U.S. sanctions on Iran and North Korea.
The recent developments underscore the lengths to which Washington has gone to shut out Huawei from several developed telecom markets.