Column: China Huawei, the dream of "5G world domination" that is crushed

Robyn Mak, Liam Proud

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[Hong Kong / London 18th Reuters BREAKINGVIEWS] -Harako Technology (Huawei), a major Chinese telecommunications equipment company, is in danger.It is surrounded by a "law barrier" and a rebound in security in all over the world.However, as the next -generation wireless communication competition accelerates, the price of "Huawei" is likely to be high.

● Why do government governments be so vigilant for Huawei?

Non -listed Huawei is a major Chinese technology company, but its global influence and penetration cannot be achieved.The company, which was founded by Len Zenfay (74), from the Chinese People's Liberation Army, has grown into the world's largest telecommunications equipment manufacturer, and has said that sales in 2018 are over $ 109 billion (about 12 trillion yen).The company is also the world's second -largest smartphone maker after Samsung Electronics 005930.KS.

But the most important thing is that Huawei is the most advanced in the next -generation high -speed communication "5G" technology.The rise of the company has strengthened the monitoring eyes.A close relationship that Niso has built with the Chinese Communist Party and the army is struggling with the company's overseas expansion.The company has expressed concern about the possibility that the Chinese government can access the back door in the company's mobile network.

Huawei argues that it has not been interfered by the Chinese government.On the 16th, Mr. Nisu, who rarely appear in the media, denied the press on such concerns.

The United States is increasing pressure on the United Nations countries, which are preparing for renewing mobile infrastructure.Huawei has signed over 30 5G contracts, but according to the US Paper Wall Street Journal (WSJ) reported in November last year, the U.S. government has to the Alliance with the risk of cyber security., We want to stop using Chinese equipment.

As the US -China trade friction increased, the situation was further escalated last December.Huawei's daughter, Men Wanto, was arrested by Canada for allegedly violating Iranian sanctions in the United States.She could be handed over to the United States.

● Is concerns appropriate?

I can't say it.The 2012 U.S. House of Representatives concluded that Huawei and Chinese telecommunications equipment giant Chuko Kono (ZTE) 000063.sz0763.hk should be prohibited to threaten national security.However, the report, which is not treated as confidential, does not show any detailed evidence.

The WSJ reported on Tuesday that the US prosecutor was investigating Huawei on the suspicion of the company's secrets from US mobile tier T -Mobile USTMUS.O.However, the problem here is the technology used in smartphone quality tests.

It is clear that China's national information law is doubtful.The law is obliged to cooperate with Chinese companies and citizens to cooperate with "national information activities."This has increased the possibility that the official statement of Huawei and ZTE will be required to be delivered by the Chinese government if requested by the Chinese government.

At present, Australia and New Zealand are imitating the United States and banning Chinese equipment in building 5G networks in their own country.We are considering restricting major markets such as Japan, the UK, and Germany.

On the other hand, problems may occur in Eastern Europe and Central Europe.The country is considering the use of Huawei products after Poland has arrested Huawei's Chinese employees and their former country's former security officials for spy on Wednesday.

● The mobile company should use the other 5G suppliers.

That is possible, but the problem is that Huawei, ZTE, Sweden Elicsson Ericb.st, and Finland Nokia Nokia.he monopolize the mobile infrastructure market.According to the IHS Mark It, more than 90 % of the world sales in 2017 were about $ 37 billion.

This has been a major problem for mobile phone companies since Huawei has increased market share at a low -priced strategy.One of the critical opinions of Australia's decisions that prohibit Huawei products is that switching to Nokia or Ericsson will increase costs up to 30 %.

The other is a compatibility issue.According to Jeffele's estimation, Huawei products account for 40 % share in the 4G equipment market currently used in Europe.Connecting the conventional network to a new network using different devices is not only risky but also costs.

With the exclusion of Chinese companies, Nokia, Ericsson, and Samsung Electronics, who are willing to gain share with eager, assuming that if they can make up for the shortage of supply, they are priced for the world's telecommunications companies.It will be enhanced.

In recent years, Nordic, which has been forced to shrink the profit by Huawei and ZTE, may be profitable over the long term.Consumers, on the other hand, will pay more communication charges in 5g use.

● The possibility that Chinese people will be completely eliminated from Europe

It is difficult to find matters that the European Union (EU) agree, and the elimination of China is the same.The EU should be "concerned," said the vice chairman of the EU European Commission, Ansip, who is in charge of technology.

Meanwhile, French French Finance Minister Lemer said that the company's largest telecommunications company Orange ORAN.PA would welcome the company's investment, despite the fact that it would build a 5G network and would not rely on Huawei.

Measures seem to be divided by country.For example, BTBT.L, a major English newsletter, has closed the Huawei from the main parts of the 5G network.

Nevertheless, European telecommunications companies are larger than those in the United States in terms of losses caused by the elimination of Huawei.

The communication market on the European continent is more subdivided.In other words, it means a low price, and it is difficult to generate decent returns from new network investment.Bernstein's analysts anticipate only 8 % of the sector from investing in 2021.It is only about capital costs."Removing Huawei" may even increase the communication fee for the next generation 5G network.

● What will happen next

Eventually, the fate of Huawei will be up to the United States.As well as pressing pressure to other countries to prohibit the use of Chinese telecommunications equipment, restricting the sales of Huawei to US technology companies as proposed by USA is impaired.right.

If Meng CFO's delivery of the United States becomes a reality, it may be a decisive blow to the company.In addition, the Chinese government's reaction will be a "wildcard" that can change the US -China relationship, for better or worse.

Governments, companies, and consumers should prepare for the by -products brought by 5 g.

* I am a columnist of "REUTERS BREAKINGVIEWS".This column is written based on my personal opinion.

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