Daily Management Review

Huawei’s Business Is Facing Trouble Across The World


Huawei’s Business Is Facing Trouble Across The World
The recent months have not gone well for Chinese tech giant Huawei. Following a series of issues that the Chinese company faced across the world, two key markets in Europe is also exerting pressure on the company. 
The use of Huawei telecommunication equipment has been ruled out for its core 5G network in France by telecommunications firm Orange. On the other hand, a review of its vendor policy will be conducted by another European telecom giant Germany's Deutsche Telekom.
The Chinese firm is the largest manufacturers of telecommunications gear in the world and also sells smartphones. in recent months, the company has been facing increased scrutiny in the United States and a few other countries across the world including Australia and New Zealand over fears that its telecommunication equipment could be used by the Chinese agencies for spying on foreign countries where they have been used or could be used in the future. The US has been at forefront in this matter and had recently also warned companies and government in its allied countries to be weary of using Huawei products because of security concerns.
Huawei has also been in the news because of the arrest of its chief financial officer Meng Wanzhou in Canada earlier this month at the behest of the US government. While Meng, who is also the daughter of Huawei founder and hence an influential executive of the company, has been released on bail in Canada, this incident has sparked off fresh confrontation between the US and China. Meng also now has to fight a lengthy legal battle over the question of whether she should be extradited to the United States – the reasons for her arrest in Canada. It is expected that she would be charged in the US of trying to cover up Huawei’s relationship with the Hong Kong based company that allegedly violated the US sanctions in Iran.
On Friday, the largest telecommunication company in France – Orange, which also has investments from the French government, categorically dismissed using Huawei equipment for the building of its 5G network in that country.
"We don't foresee calling on Huawei for 5G," Orange CEO Stephane Richard said Friday. "We are working with our traditional partners — they are Ericsson and Nokia."
At the same time, Deutsche Telekom said that the debate over national security concerns with and of network elements related to the use of Chinese equipment is being taken "very seriously" by it.
"We are pursuing a multi-vendor strategy for the network elements used (manufacturers primarily Ericsson, Nokia, Cisco, Huawei)," the company said in a statement. "Nevertheless we currently reevaluate our procurement strategy."
There has been no comment so far over the developments related to the two European telecom companies.
The proposed merger of T-Mobile with Sprint could also be influenced by the most recent announcement from Deutsche Telekom and the reports about the possibility of SoftBank also replacing Huawei equipments with those from other suppliers. Deutsche Telekom owns majority shares in T-Mobile while Sprint is a Softbank subsidiary.