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Europe is showing Huawei the exit

Europe is showing Huawei the exit

  • Written by Iain Morris / Light Reading
  • 11th September 2020

One year ago, Huawei was the pestilent squatter US authorities simply could not evict from Europe’s networks. The region’s operators rejected Trump’s characterization of the Chinese vendor as a dirty thief, listing its many virtues. An eviction would be too costly, they also complained. Attentive governments, worried about losing the 5G race, were firmly on their side.

But after some tightening of US sanctions and Trumpian threats to non-compliant European governments, Huawei is being steered toward the exit. Not overtly, sometimes. While the UK has officially banned Huawei from selling 5G products after this year, demanding that networks be entirely scrubbed clean of Chinese products by 2028, other countries and service providers are taking a more subtle approach. Yet the outcome will be the same: the withdrawal of Huawei from most of Europe.

Sanctions, and not political threats, have probably been the main difference. Last year, when it was stopped from buying components made on American soil, Huawei exploited loopholes to protect its supply chains. Newer measures that bar it from acquiring any components made with US tools or software look more calamitous. In a recent blog, Richard Windsor, an analyst with Radio Free Mobile, said that “no one can make a silicon chip without using a piece of equipment or software from a US company.”

There are just two possible scenarios. The less likely one is that sanctions prove fatal to the Chinese equipment giant, undermining its foundations while it struggles to find alternative components. This risk has appeared to grow with recent reports that US authorities are preparing sanctions against SMIC, a Chinese semiconductor fabricator reliant on US technology. As things stand, SMIC is probably Huawei’s best alternative to TSMC, a Taiwanese fabricator that has already halted supplies.

More probable is that sanctions weaken Huawei, forcing it to fall back on sub-par components when its current stockpiles run out in the next year. Either way, for European governments and service providers, the danger posed by a weakened or dying Huawei now outweighs any lingering concern about eviction costs and a near-term loss of 5G competitiveness. Even if Huawei’s technology is superior to rival products, any technical edge is likely to vanish during a components blockade.

The subtle knife
European efforts to evict Huawei have taken numerous forms. Rather than banning it outright, as the Brits have done, French authorities will reportedly decline to renew the Chinese vendor’s regional equipment licenses when they are due to expire. Huawei currently provides about half the radio access network (RAN) equipment used by each of SFR-Numericable and Bouygues, two of France’s four mobile network operators, according to Strand Consult, an advisory group. If the reports are accurate, those service providers will have until 2028 to find alternatives. Orange and Iliad, their rivals, already rely entirely on Sweden’s Ericsson and Finland’s Nokia, Huawei’s main rivals.

To read the complete article, visit Light Reading.

Tags: Critical Infrastructure Cybersecurity Enterprise Federal Government/Military Funding News Policy Public Safety Regional Coordination Security State & Local Government System Operation Partner content

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